Thursday, June 19, 2014
Japan threatens a breakout
So the big runup in 2013 was all due to Abe excitement. Obviously that ran into a wall when people realized it would take time to boost Japan's economy (Modi lovers take heed).
But Michael Shaoul's been pointing out that the numbers coming out of Japan show continued improvement, the sales tax hike wasn't a big deal, and so now EWJ looks to be threatening a break above $12.
So if you have a DM long slant but you're scared of the US runup, or you're expecting poor performance because it's a midterm year, and you think Europe is about played out, then maybe you start looking at Japan as a place to put your money?
Also, please note that Japan is one of the largest economies in the world, and the rest of the world has had zero boost from Japan for the past 20 years. The return of growth to Japan would be a massive game-changer for the world economy. Not that I'm convinced Japan's going to accomplish much, but if it can then there's massive upside risk to the world economy.