The Japanese story

There are two distinct schools of thought on the outlook for Japanese equities. In one corner stand the optimists, who are mainly overseas fund managers. They argue that 'this time it is different', meaning that the near 60% recovery in the Nikkei 225 index since the end of April 2003 will not go the way of previous rallies during the fourteen-year bear market which started at the end of 1989. In the other corner are the doubters; predominantly domestic fund managers, who have seen it all before and contend that Japan's structural problems have not be solved, only given a cosmetic coat of w...