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Japan Might Be Extremely Profitable Investment Comments

John Gazy   |   February 14, 2008
As previously expected, analysts have finally stopped talking about China as the only favorable market for investment. Rumors say that Chinese stock market is a bubble and investors are drawing their attention away from it looking for alternative markets.

According to Merrill Lynch (MER), Japan may soon become, if not yet, such an alternative. Its major industries are manufacture, construction, distribution, real estate, electronics and communication.

The Economist reports that commercial real estate prices rose nationwide in 2006 � the first such increase in 16 years! Offices and commercial property prices rose 10.4 percent in Japan�s biggest cities Tokyo, Osaka, and Nagoya.

Andrew Shipley, a well-known economist and author of The Japanese Money Tree claims that Japan is now on the verge of a sustainable economic rebirth that will produce enormous profits for prepared investors.

The Motley Fool compares P/E ratio of Chinese and Japanese major indices and recommends investors to look closely at the Japanese stock market, predicting it will see a great financial future.

Does Japan in fact have a hidden potential? Is it true that the country is about to experience great economic changes? Let�s take a look at the Japanese economy.

At the end of 2007, Japanese stock market closed with the worst result among the largest markets. During that year, Japan�s benchmark Nikkei index lost 11 percent. �This fact seems to reflect that our country is losing its attractiveness as a place of investment, while �oil money� and other huge excess funds flow around the world,� said TSE Chief Executive Atsushi Saito. He also noted that Japan was one of a few industrialized nations to suffer a drop in share prices during 2007, as the U.S. subprime mortgage problem cast a long shadow on markets around the world. Furthermore, increasing oil prices cause Japanese manufactures to incur huge production and transportation expenses. And finally, Japanese yen has retreated significantly and its rate of inflation has reached its highest point since 1999. All this makes investors very nervous.

Some specialists however insist that Japan is perfect for long-term investors. Others, on the other hand, do not yet recommend switching over to Japanese market.

If you are still willing to take a risk and invest your money into dubious Japanese stocks, I suggest looking closely at such companies as Toyota (TM), Honda (HMC) and Nissan (NSANY). The companies are successfully developing in the new markets, launching plants in China and Russia.

Besides, the companies design new fuel efficient models such as hybrids. New innovations offer companies a great chance to cope with increasing oil and gas prices.

And finally, consider largest manufacturers of electronics. Such brands as Sony (SNE), Matsushita (MC) and Olympus (OCPNY) continue their domination as �the world�s best electronic manufacturers�.

If you are willing to get exposure to Japanese market you may easily purchase stocks of any major corporation through the US stock market.
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