This Day On The Street
Continue to site
ADVERTISEMENT
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

He is also bullish on the new management of Hitachi, which is much more shareholder friendly. Now trading around $69 a share, the mean analyst target price for Hitachi is $79.50. The mean analyst recommendation is a "1," which is a strong buy.

Strong has also been the performance of iShares MSCI Japan Index (EWJ), the main exchange-traded fund for the economy, and Toyota Motor (TM), a useful tracking stock and indicator for the export community of the country.

Over the last year of trading, iShares MSCI Japan Index is up more than 30%. That certainly reflects the improving economic outlook for the country after more the prolonged period of "The Lost Decade." At around $11.70, it is close to its 52-week high of $12.38, although there has been a dip in recent market action.

For the same period, the stock price of Toyota has soared almost 60%.

Must Read: Ruth's Hospitality Group About To Put More Money In Your Pocket (RUTH)

A weaker yen makes its motor vehicles much more price competitive in export markets. On a quarterly and yearly basis, earnings-per-share for Toyota have surged in the triple digits, as a result.While that is clearly unsustainable for the long term, the mean analyst projection is that Toyota will have earnings-per-share growth averaging 32.50% for the next five years.

By contrast, it is expected to be 14.77% for Ford Motor (F) and 16.87% for General Motors (GM).

As with so many other nations, Japan's economy will improve more when growth in China, its largest trading partner, accelerates.The present stimulus policies of Prime Minister Shinzo Abe have been beneficial for the short term, but currency manipulation is hardly the prescription for long term economic growth.

Business investment and sentiment will have to continue improving if The Lost Decade for Japan is to finally end after more than 20 years.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Jonathan Yates is a financial writer who has had thousands of articles appear in periodicals and Web sites such as TheStreet, Newsweek, The Washington Post and many others. He has degrees from Harvard University, Georgetown University Law Center and The Johns Hopkins University. He does not have a position in any of the securities mentioned in this article.
2 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
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $112.76 -0.47%
FB $89.43 -1.74%
GOOG $618.25 -1.92%
TSLA $249.06 0.23%
YHOO $32.24 -2.72%

Markets

Chart of I:DJI
DOW 16,528.03 -114.98 -0.69%
S&P 500 1,972.18 -16.69 -0.84%
NASDAQ 4,776.5080 -51.8170 -1.07%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs