The Japs are buying...

Japan is one of my most familiar market, as I spend nearly one year just focusing on Japanese market. Japanese companies and their banks are famous for their conservatism and their large pile of cash.

The Japs have been soo risk-averse after the 1990 bubble burst that they love to be "debt-free", the exact opposite of their US counterparts. There is a dilemma in this, as Japanese companies has very little growth in the domestic market, but are reluctant to borrow and expand to other countries. This problem is especially obvious for the big Japanese banks, which has large retail deposits but no where to spend it. Explanation: Japs love to put their cash in banks, they do no trust the stock market anymore. They also know that the housing market is not guarantee to go up forever (when will Chinese learn that?) , they have experienced the biggest housing bubble before 2008 and also frequent earthquakes confirms their view that real estate is a liability (mortgage payment) while the actual house depreciate over time.

Now the Japanese banks are finally taking action, Mitsubishi UFJ and Nomura have start to purchase overseas business from the dying US financials . This is a good step and will allow them to grow while the domestic market slowly contract due to the aging and decreasing population.

This is the best time for the Japanese companies to put their cash into good use. Not just the banks. I really think Nintendo should do something with their over 1 trillion cash deposit in bank....

Only time will tell if the Jap market will become a market that worth investing again. I still think it is not, not yet.