April could be cruellest month for Japan as tax cuts set to be reversed

Spring in the air could also bring a slump in market-buoying consumption in Japan as 1999 tax cuts are nullified, but managers are still finding opportunities

Japanese managers are cautiously optimistic about prospects for the domestic market, partly because of a local capital expenditure cycle that was forecast to peak in mid-2004, but whose legs have carried it more robustly and longer than expected.

Keith Donaldson, co-manager of the Martin Currie Japan and Daijiro funds, says Japanese stocks are "set to play catch-up" with the rest of the world, after lagging foreign markets by about 10% over the last six to eight weeks of 2004.

"Overall, the