“Hong Kong’s Undersecretary for Food says, since March 21, over 200 batches of food had been tested and no abnormality detected… I had one of my guests today, she flew in from Tokyo to Hong Kong, and she said a lot more of her staff are flying in today to seek refuge in Hong Kong, and they don’t know when they’re going back to Japan.
“Clearly, the Japan market has been very weak so far this as you mentioned the earthquake and tsunami has been the starting points of that and it hasn’t rebounded at all strongly since then.”
The Nikkei 225 Index is now at about a quarter of its 1989 peak – nowhere near China’s bourses, which are now more valuable then Japan’s. The supply chain disruptions resulting from the earthquake, to the floods in Thailand months after, have hit Honda’s factories the hardest.
Rival, Toyota, has halved its annual profit outlook.
And then there’s the Olympus scandal, which rocked Japan’s corporate world.
Michael Woodford’s revelations bringing to light the peculiarities of Japanese corporate governance.
In spite of all that, billionaire, Warren Buffett, says there’s nothing man made – or otherwise – that will stop him from investing in Japan.
“My view of the Japanese people, my view of Japanese industry is unchanged. Olympus doesn’t change my view at all on Japanese investments. I’ve just had a demonstration in the last nine months of the fact that, that something like the tsunami could produce an interruption, that it could not stop Japan’s business.”
Shortly after the March earthquake, Buffett described Japan as “a significant buying opportunity.” This comment gave a solid boost to Japan’s Nikkei average at that time.
Now strategists are recommending Japan for their clients in the New Year.
“We see during times of uncertainty cash going back to Japan from Japanese investors going back to Japan buying the yen or foreign investors like for example Asian central banks diversifying into yen and into JGBs that’s why we actually see the yen could actually rise in the next six months or so.
“The Japanese equity market on a relative perspective within Japan is actually going quite attractive. It’s actually kicking around the 2003 and 2009 lows so all this argues for a better environment in Japan.”
Japan had a bumpy 2011, but investors haven’t gone away. How to keep that momentum going is key to Japan for 2012.