New Japanese PM's first year in office will not be easy

Japan, the world's second-largest economy, has for 20 years been an unfashionable area to invest in and therefore largely ignored by investors.

The new Prime Minister, Mr Hatoyama, will not have an easy first 12 months in power. The policies for supporting economic recovery are now emerging after a period when investors have sold the market on the uncertainty the political change represented. Looking forward to 2010, we can be a lot more confident the drags on growth in 2009 might actually be alleviated, at least to a degree. The strength of the yen has crippled both Japanese manufacturing and also as a consequence, domestic consumption. Having recently hit a 14 year high versus the US dollar and strengthened by 40% against t...