Big week in Japan (EWJ, quote) with Consumption Tax hike and Tankan Survey fueling all kinds of speculation about Japan serving up some more stimulus for markets.  

japanIf Abe and BOJ are sentimental they might remember it’s the one year anniversary of their massive surprise stimulus annoncement which served as rocket fuel for Japanese equities in 2013. The moves last year quickly sent USD/JPY (FXY, quote) from 93 to 100 and laid the foundation for expectations today.

After an awful start to the year, the Topix is higher for 6 straight sessions. There is a sense that Japanese pensions are about to make fresh allocations to equities which are still way underweight. This could carry the market to another leg higher along with new stimulus.

We continue to favor exporters and think you take advantage of auto selloff to buy Toyota (TM, quote) as one the cleanest plays to industrial recovery and easier exports on weaker JPY.  

We like industrials in Japan as well and think transports (airlines) look undervalued.  Play Japan Airlines on bounce off key techncials and cheapest major global airline. 

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