JAPAN-Nikkei-Time to go back up? Message Board

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Strategies & Market Trends : JAPAN-Nikkei-Time to go back up?

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To: Step1 who wrote (1643)	12/13/1998 6:21:00 PM
From: FACTUAL	Read Replies (1) of 3902

Based on the PPP ( Purchasing Power Parity ) Theory the yen is still high and consumer products prices can still fall. Relatively speaking the yen has strengthened vis-a-vis its consumer products suppliers ( China, Korea, Thailand, Malaysia, Australia, Taiwan ). Thus price destruction should continue. Is internet shopping taking off in Japan? Applicability of US style resolution to the Japanese banking crisis is limited. Most Asian countries do not culturally have an adversarial process ingrained but rather are governed by Mandarins. Thus the apparatus (e.g. lawyers ) simply does not exist. All the lawyers in Japan may be able to handle all the problems of say a single jusen. But the system at large will have to economically grow out of it unless a combination of external pressure and internal power balancing make some resolution feasible. The economic crisis in Japan may worsen if the Chinese devalue ( the other option being for the Chinese to continue their current Ponzi scheme in the construction sector ), and/ or the situation in Russia does not get better. Should the Fed raise rates or the ECB stay with its original mandate, substantial relief in Japan wil be indefintely delayed. Property in Asia and Japan still do not factor realistic market prices. If they do ( which is unlikely ) plan on a major depression. All this suggests that fiscal stimuli are not appropriate- perhaps radical action on the monetary front is required which will almost certainly have unpredictable and nasty surprises. Understandably the government has elected to try and grow their way out of this. I remain puzzled as to why there is an expectation that Japan will turn in two years. It may, but I cannot see the reasons why. Merry Christmas

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