With our worldwide economic turmoil many investors felt the Japanese market was still a place of greater economic strength in comparison to the US and the EU. Many felt the East’s stock prices were already exposed to the effects of a recession or at least prices were already at their recessionary low. The Japanese economy has now contracted for their second consecutive quarter which leaves further concern. The challenge the Japanese manufacturers face is due to the reduced demand for goods and services around the world demand for Japanese products will also decline.  Also, with the Japanese Yen at such a high value the price of goods for imports to the other countries makes Japanese products that much more expensive to buy. Japanese exports will decrease as well as projected profits for large Japanese manufacturers.  We are starting to see this now.  For example, Toyota has seen its largest decline in profits of approximately 69%. In October alone their exports to the US dropped by 23%. Even outside the auto industry Cannon exports have already dropped by 12.6, with Sony 11.1% and Panasonic shortly behind at 8.5%.  These are clearly red flags and a sign to really look at these stocks, whether you want to weather the storm or get out now.  If you have Japanese stock in your portfolio, I would really consider if this is a time to sell with the goal to get back in the latter part of 2009.  If you have already experienced a significant drop in your holdings then you may want to hold knowing you can buy at a lower price later on in 2009 to reduce your average dollar cost.  With this in mind some may feel there are some great buys in this market as well.  I would put a bit of caution out there as the East may still be falling with the rest of the world with an expected recovery following the US, etc as they are dependent on Exports.  Until the rest of the world starts to recover the East then follow.   http://www.creativefinancialsolutionsplace.com/stockmarket.php