Japan's Stock Market Signals Better Times

After plunging in the aftermath of last year's earthquake and nuclear disaster, Japanese stocks may be poised for a comeback. Profits for the large-cap companies in the Nikkei 225 Stock Average will rise 69% this year after plunging 31% in 2011, according to more than 2,600 analyst estimates compiled by Bloomberg. Bulls say the current high valuations are justified because an economic recovery will help Japanese stocks make up some of the ground they have lost to other major equity gauges since global markets bottomed on Mar 9, 2009. One reason: Policy makers in Tokyo have committed to spend 20 trillion yen ($246 billion) to rebuild towns and spur economic growth. Bank of Japan Governor Masaaki Shirakawa pledged during a speech in New York in April to continue adding monetary stimulus.