The chart shows monthly bars on the NIKKEI 225 future. The index is returning to the 21000 key level, a level its failed to surpass since 1992. Price is above its 52 week Moving Average, and momentum is up for the only second time since the 1980's.
Whilst the rest of the Worlds post Global Financial Crisis recovery began in 2009, Japan's was delayed until the massive stimulus by Prime Minister Abe in 2011. This was offset by a JPYUSD fall in almost perfect sync. Interestingly the recent rally in 2017 has been positively correlated to JPYUSD, demonstrating that the rally is driven by higher inflation and growth expectations, building a solid case for further gains.
In summary the case for a Japan bull market is:
1. Improving earnings outlook with a strengthening domestic economy
2. Currently attractive equity valuations compared to developed market peers
3. Inflation picking up
4. Continued monetary stimulus
Whilst the rest of the Worlds post Global Financial Crisis recovery began in 2009, Japan's was delayed until the massive stimulus by Prime Minister Abe in 2011. This was offset by a JPYUSD fall in almost perfect sync. Interestingly the recent rally in 2017 has been positively correlated to JPYUSD, demonstrating that the rally is driven by higher inflation and growth expectations, building a solid case for further gains.
In summary the case for a Japan bull market is:
1. Improving earnings outlook with a strengthening domestic economy
2. Currently attractive equity valuations compared to developed market peers
3. Inflation picking up
4. Continued monetary stimulus
Comment:
Holding to 25,000.