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Alumnus Predicts Japanese Stocks on the Rise

by Staff Wednesday, July 11, 2012

Through two decades of spiraling deflation, Japan's stock market has continued to lose value and confound bargain hunters. Each time it has looked like a bottom, there has been a mishap, unexpected jolt, or downward pull.

Despite all that, it finally might be the right time for Japanese stocks, states Michael Jolin, research analyst at Heartland Advisors, Inc. and graduate of the MBA Applied Security Analysis Program at the University of Wisconsin-Madison. He adds, "There's a large graveyard of people who have said this before, but we're seeing convincing signs of improvement."

Analysts expect more than 40% earnings growth in Japanese stocks in 2013, Jolin said. Corporate profits are rebounding, and his analysis shows bank lending is picking up.

Despite Japan’s high debt levels and its negative trade balance, the Bank of Japan is expanding its government bond-buying program to stimulate the economy. The government also plans to gradually double the consumption tax to raise money to pay down debt. Per Jolin, those trends and Japan's aging population are expected to help these Tokyo Stock Exchange companies, regardless of what happens in Europe.

Read the full article in the Milwaukee Journal-Sentinel here.