24 March 2011

When Japanese is great, when Japanese is bad?

It would seem that the nuclear meltdown risk is gradually tapering down with positive hope in sight.  However, the effects of the fall-out is still propagating.  Restaurants which branded their Japanese heritage were often seen as up-market.  But right now, the same branding is probably a death knell.  Japanese restaurants are experiencing an immense sense of emptiness with no customer in sight.  Perhaps, it is now the optimal time for these restaurants to do whatever major maintenance work needed and wait out this period of fear for all things Japanese.  Will these companies survive the drought in business?

18 March 2011

Japan and the Rest of the World

Understandably, the Japanese stock market is nose-diving.  In the aftermath of the multiple disasters of earthquake and tsunami, and the continuing threat of multiple nuclear meltdown, Japanese businesses are deeply affected one way or another.  Aside from property loss, it is also the loss of manufacturing facilities, evacuation and relocation of its workforce, dislocation of distribution facilities and networks, and the impact of energy shortage within Japan.  There would probably be an even heavier sell down thereafter to convert stocks to cash to support rebuilding, especially to rebuild households.  There is perhaps room for a 20-40% drop. 

On the other hand, the reasons for a global meltdown of the stockmarkets weigh heavily on the unstable events in MENA and the risk of a slowdown in the 2nd largest global economy (Japan).  There is perhaps room for overselling and hence an opportunity to buy in for the longer term.  Certainly, there will be a need in massive infrastructure reconstruction in Japan as well.  But that is probably going to be on hold till the risks at the nuclear plant are brought fully under control.