This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bullish Outlook Still Prevails for Japan Despite Bearish Monthly Indicator

NEW YORK (TheStreet) -- Although core machinery orders are expected to fall by 1.4% in September after a strong gain in August, analysts are still positive about the economic recovery in Japan due to improving company profits and sentiment.

Despite the predicted monthly decline, analysts expect core orders to be up for the second consecutive quarter. In a statement from Dai-ichi Life Research Institute regarding its polling of 24 analysts, it was noted, "The core orders probably fell in September as reaction to a big gain in the previous month, but they remain in a rising trend. Machinery orders, a leading indicator of capital spending, is expected to move in an uptrend due to improvement in corporate and sentiment."

Should that transpire, it would be another sign that the reflationary policies of Prime Minister Shinzo Abe of boosting demand and exports with quantitative easing measures that have weakened the yen are working. Japan's economic growth has outpaced that for other G7 nations this year.

Another sign of increasing demand in Japan is a recent business poll is that wholesale prices are expected to have increased 2.5% in October from a year earlier, accelerating from a 2.3% rise in the previous month.

A bullish outlook on the island nation was the foundation for a speech in late October at "The Invest for Kids" conference in Chicago by Dinakar Singh, founder of TBG, a hedge fund with $6 billion in assets under management. Of the 30 positions held by TBG, six are Japanese stocks, Singh stated. In his remarks, he was particularly bullish about Hitachi (HTHIY).

Singh was positive on Hitachi as he contends the market is characterizing the stock wrong as a consumer electronics firm. According to Singh, Hitachi is now an industrial equipment company, much like Emerson Electric (EMR) and Phillips (PHG). Hitachi should be trading at the price-to-earnings ratios of Emerson Electric (32) or Phillips (41), rather than far below the market average of around 20 at less than 15, currently.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%
YHOO $44.52 0.00%


DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs