Japan Prospects and Impacts

This is a great buying opportunity in Japan,says Robert Masetti of French financial titan BNP Paribas.The crisis will take down Japan's GDP by 1.2% this year.In 2012,we will see a 1.2% bump in GDP.We could see their inflation go to 1-2%.
We're not trying to pick a bottom.This will pass.It will play out.Look at the positives:an end to deflation;a recapitalisation.It would be surprising to us to see a big drop of the Japanese market from these levels.
Japan remains attractive.We're positive about the medium to long term outlook for Japan.This is yet another buying opportunity along the path of an improving Japan,according to Mr.Masetti.
Short term,the Japan crisis is having an industrial impact worldwide.GM is shutting a plant in Indiana because of a lack of parts from Japan.Almost all U.S. vehicles have Japanese components.One fifth of chips are Japanese.These chips are in household appliances from refrigerators to stoves,as well as a number of consumer electronic goods.
iShares Japan Index Fund(EWJ)

BNP Paribas Forecasts 2010

Brian Fabri,Chief Economist at global bank BNP Paribas,says the U.S. economy still needs help,and that is why Federal Reserve Chairman Ben Bernanke will keep interest rates low.By Q3 2010,there could be nasty surprises in the economy.Banks still are gonna be writing off more bad debt.Commercial real estate will cause more losses for banks.State and local governments will be insolvent,probably needing more federal aid.I think we go from 3% growth to 1.5% about the middle of next year.There are significant head winds,a number of little factors.In 2010,liquidity stops growing.It could create another flight to safe dollar/Treasury move.We will return to reality from the golden handshake.We will back away from risk-taking about the middle of next year,Brian Fabri predicted.
The economic research department of BNP Paribas is a worldwide function grouping together economists based in Paris,New York,London and Tokyo.BNP Paribas has 202,300 employees in 83 countries.Its three core businesses are Retail Banking,Corporate Investment Banking and Investment Solutions.It was named 2008 Global Banker of the Year by The Banker magazine.

Asian Highlights

Andrew Freris of BNP Paribas says that,in terms of balance sheet fundamentals,Asia has been essentially unaffected by the subprime mortgage problem.Asian central banks have been free to focus on inflation.Japan was a lender,so it is in better shape than the U.S.,which was a borrower.Singapore isn't much exposed to the declining U.S. export market.Medium term,Mr.Freris likes Asian financials.The Korean banks are the cheapest in Asia.Nonetheless,central banks in Australia,Japan and India have injected capital into their banking systems to counter instability in their financial markets,which have been troubled by the Western financial crisis.