funny, what we were just debating.... per trade the news asian market update: - As the Bank of Japan waits for stronger data before proceeding to hike rates, Japan's November all industry index came in at -0.2% m/m v 0.0%e. Bank of Japan governor Fukui was indecisive over monetary policy in a press interview. He said that rate hikes could ultimately benefit the economy but the Bank of Japan would rather err on the side of caution as long as data are mixed. When asked about the carry trade, he said that the Bank of Japan cannot guide policy without keeping in mind the risk of an unwinding of imbalances. If japan does indeed raise rates, i don't care how strong the nikkei is, the yen will appreciate on the usd.
Global liquidity increased 18% per annum last 4 years. Record. The world is awash in money looking to roost anywhere, somehere with above average returns. When will this madness end......
This reminds me of the corporate dinners I get to go on, we order whatever we want, best bottle of wine, multiple appetizers, best cut of beef. We get to live large for a few hours. Eventually the bill comes and one of us has to pay the piper. Seems like the bill has not come yet in this table made of angus choice bulls.
There's another factor no one has mentioned. Japan is relatively cheap. The market has gone nowhere in the last 10 months, whilst the western markets have soared. Also, Japan is only 3 1/2 years off a 20 year low in equity prices. The Nikkei is currently trading where it was 20 years ago. TWO DECADES AGO. That's like the Dow trading at 2000. People are missing the forest for the trees here. Mark my words, Japan is going to have a major bull market in coming years. It's going back to the old highs. It's going to 50,000, then 100,000. Just find 3 good smallcap Japan funds, then put 100k into them, and *don't sell*. I guarantee you will be a millionaire off those investments alone. Japanase stocks are going to do what US stocks did from 1982 to 2000.
The "so expensive" Tokyo that everyone has on their minds is also an outdated impression. Rents, meals and real estate in Tokyo are now all extremely reasonable. Japan has gone almost full circle, from being one of the most expensive countries in the world - where the land on which the imperal palace sits on in Tokyo was estimated to be equal in value to the entire state of California - to where a good meal costs slightly less than in Manhattan.