Is the Japanese Recovery underway?
http://www.bloomberg.com/apps/news?pid=email_us&refer=asia&sid=ahF5SUDZWM.4
Nikkei is rallying on speculation that March 3 data release is going to show a gain in both industrial production and CPI.
As my commentary has run, I've been laying my bets on a Japanese recovery for the past year. I thought the recovery would show legs 4Q05 and be underway by 1Q06. Tough to say if this is the push that will get the Japanese economy back on track, but stable inflation in the major AXJ countries, continued liquidity, maintained strength of the USD, and churning out of the bears on continued Chinese growth are setting the backdrop for a feasible framework for Japanese growth.
Yen appreciation and AXJ appreciation though are worth keeping an eye out for, as unhedged earnings may shock investors come 10Q time.
Nikkei is rallying on speculation that March 3 data release is going to show a gain in both industrial production and CPI.
As my commentary has run, I've been laying my bets on a Japanese recovery for the past year. I thought the recovery would show legs 4Q05 and be underway by 1Q06. Tough to say if this is the push that will get the Japanese economy back on track, but stable inflation in the major AXJ countries, continued liquidity, maintained strength of the USD, and churning out of the bears on continued Chinese growth are setting the backdrop for a feasible framework for Japanese growth.
Yen appreciation and AXJ appreciation though are worth keeping an eye out for, as unhedged earnings may shock investors come 10Q time.
posted by howa at
2/27/2006
