In today's column, I'll respond to questions for Global Portfolio on distant countries and how to obtain key information on international investing.

Reader

Philippe Fossier

asks about the world's second-largest economy, Japan. He points out that Japan has become mostly uncorrelated to U.S. markets and the Japanese economy is showing signs of a recovery. "Yet, the best performers in the

Nikkei

(Japan's benchmark stock index) are small high-tech companies that move in sympathy with the

Nasdaq's fortunes. I own a fund that invests in Japan, but having seen the correction of the past three months, I am loath to add to it. What are your thoughts on the Japanese economy?" he asks.

It smells worse then bad sushi, to put it bluntly. For years, I've been hearing that the Japanese economy is just about to awake from its comatose state and there will be a repeat of the strong economic growth of the 1980s. Fans of the Japanese economy are sort of like

Red Sox

supporters, believing every year that this will be

the

year to win the World Series. And yet the ground ball that kept the Sox from winning the fall classic in 1986 keeps going through

Bill Buckner's

legs.

Last year, optimism that Japan had turned the corner was at least partly behind the strong rise of the Nikkei. It rose 41% in 1999 and another 10% early in 2000 before peaking in April. However, the economy contracted the last two quarters of 1999, technically placing it in recession, and the government only expects to grow around 0.5% this year. Since April, the Nikkei has fallen 16%, and it is still only around half of the peak it hit in the late 1980s.

Whether the economy is now growing again or not, its long-term potential is still limited by a lack of domestic consumer demand and by a sclerotic political system unable to tackle economic reform. Add to that the huge public debt that now hangs over the country as a result of massive spending on government projects aimed at spurring growth and a central bank now contemplating raising interest rates, and you don't exactly have a recipe for dynamic growth.

However, the sour economic conditions in the country don't mean it is necessarily a bad place to invest. While the government hesitates to fuel too much economic reform -- it would have the politically unpalatable effect of putting a lot of people out of work -- many corporations are undergoing dynamic restructuring on their own. The average Japan fund was up 114% last year, well outpacing the Nikkei and the

Morgan Stanley Capital International Japan Index

, which was up 61%. This year, the average is down 17.58%, according to

Morningstar

, but the three-year average annual return is a respectable, if not outstanding 11%. And Japan still hosts world class companies such as

Sony

(SNE) - Get Report

.

Fossier doesn't say whether his fund is a Japan-only fund, or one that simply has large holdings there. A broader, regional Pacific fund that includes Japanese holdings would diversify risk, while still making the most of the opportunities of strong Japanese companies. However, the

(MJFOX) - Get Report

Matthews Japan Fund, which requires an initial investment of $2,500 and carries an expense ratio of 2%, is up 10.6% this year. That's an impressive return, considering how poor markets everywhere have been this year. It is the best-performing fund in the Japan-only category, if you exclude the

(DFJSX) - Get Report

DFA Investment Dimensions Group Japanese Small Companies Fund. (It makes sense to exclude it as the fund is essentially for institutional investors and requires a $2 million initial investment.) On the other hand, the best-performing Pacific fund is the

(SAAFX)

Schroder All-Asia Fund, which is down 3.6% this year. So money can still be made in Japan -- and, coincidentally, the Red Sox have a decent shot at the pennant this year.

Moving on,

Peter Greenlees

asks, "Where can one find out the amount of discount or premium on a particular fund?" He is referring to the difference between the price of shares of closed-end funds and the net asset value divided by the total number of the shares, which theoretically is what the fund should be trading for. A good source I've found is

www.closed-endfunds.com.

By the way, the two Japan closed-end funds, the

Japan Equity Fund

(JEQ) - Get Report

and the

Japan OTC Equity Fund

(JOF) - Get Report

are trading at substantial discounts of 22% and 28%, respectively. Apparently, investors are skeptical that Bill Buckner will ever field that ball.

David Kurapka's Global Portfolio column appears Mondays, Wednesdays and Fridays on TSC. In keeping with TSC's editorial policy, he does not own shares in any companies or mutual funds mentioned in this column. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at

dkurapka@thestreet.com.