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The recent weakness of Tokyo stocks has created a golden opportunity to buy shares despite growing concerns about worldwide price falls.

U.S. companies, especially internationally active high-tech firms, are revising their earnings forecasts downward for the second half of this year, indicating the U.S. economic recovery may fail to live up to expectations.

The slowed U.S. economic recovery is surely the biggest matter of concern for Japan and other Asian economies.

But an objective analysis of past lessons shows that a cyclical macroeconomic recovery caused by the inventory cycle hardly becomes short of breath once it starts, as long as there is no external shock.

Investors should pay more attention to the fact that the cycle of economic activity and corporate earnings at present are vitally different from those just after the Sept. 11 terrorist attacks.

As hedging sales and other moves to avoid risks tend to cause a one-way fall in stock prices in thin trading, the Tokyo market is likely to show downward trends for now. In the meantime, a sense of relief will return to the U.S. market as it has refused to fall below a low of 944.75, as measured by the Standard & Poor’s 500-stock index, set after the September attacks.

The 225-issue Nikkei average is thus expected to stage a moderate rally in light of Japanese stocks’ tendency to follow U.S. stocks.

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