Take profits while political storms settle in Japan

The beginnings of a bullish consensus is being formed in Japan - but not everyone is entirely convinced that now is the best time to invest...

The beginnings of a bullish consensus is being formed in Japan. Even in the wake of the Livedoor scandal of last month (which prompted a temporary sell off of the Nikkei index), most analysts and strategists say it is one of their favourite markets for 2006.

This is due to the fact that the economy finally appears to have pulled itself out of the deflationary spiral of the last 15 years. Indeed, over the last month nearly all the data from Japan (from consumer confidence to prices and bonuses) has been impressive, and there is evidence, says Jonathan Allum of KBC, that the confidence of the bears is on the wane.

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