"Ever since the new government took control, it feels as though Japan is filled with the spirit for economic revival", said Toyota's senior managing officer, Takehiko Ijichi, last week, as he announced the carmaker's first profit in five years.

Takehiko Nakao, the top currency official at Japan's finance ministry, said: "Last year all the focus was on the euro and the fiscal cliff. Now Japan's successful economic policies are receiving all the attention."

Abenomics do appear to be working. Data this week showed that December's figures for machinery orders, a key indicator of capital spending, rose by 2.8 per cent, confounding expectations of a decline. Japan's service sector sentiment index also jumped, and the December "Economy Watchers' Survey", which measures the mood in companies and households, showed
growing confidence in every area.

Even trade with China, Japan's biggest trading partner, is improving, after a boycott of Japanese products last year. On Friday, Chinese customs figures showed that imports from Japan rose by 15.4 per cent in January, for the first time in six months.

Most economic analysts believe that Japan probably exited recession in the already bottomed out and is showing a recovery", said Tatsushi Shikano, senior economist at Mitsubishi UFJ Morgan Stanley Securities.

Perhaps the most significant trend of all is that wages are showing signs of rising. One of the country's biggest convenience store chains, Lawson, said last week that it would raise salaries by a deflation-busting 3 per cent.

Jesper Koll, head of Japan equity research for JP Morgan, said: "Japan is running out of labour, so businesses now need to breed loyalty among their staff. Watch for wage inflation to generate a real feel good factor in Japan."

David Fuller's view The article also points out that the "hard part will be deregulating the energy, healthcare and agriculture sectors." Sure, and agricultural reform, long resisted in Japan, will face opposition within Mr Abe's own party. Nevertheless, he has most of the public behind him because people can sense the positive change.

Japan remains the most interesting major market opportunity that I have seen for a long time (historic monthly, weekly & daily). The recent sharp reaction, albeit to scale, has created another buying opportunity.