Ingredients in place for Japan to parallel rest of Asian economies

With some justification, investors took an increasingly positive view of the prospects for most Asian markets last year.

At the macro level, a combination of loose monetary policy and growing confidence in a sustained global economic recovery supported share prices. At a micro level, meanwhile, we saw the largest upgrades to analysts’ earnings expectations for Asian companies in 25 years. As a result, share prices across Asia doubled from their March lows – the region’s markets feature prominently on a list of 2009’s best performers. Over the year as whole, China rose by 44%, the Korean market moved 53% higher, Taiwan added 60% and the Indian market gained an impressive 81%. One country, however, is con...