My biggest concern is that this is just the tip of the iceberg. If it does turn out to be a widespread problem, then you will get a widespread loss of confidence by consumers.
There is little difference between the philosophies of the government and the opposition. If the market was weak on a DPJ victory, this may be seen as a buying opportunity.
Positive surprises are still possible in areas such as banking. Major banks have largely eliminated their non-performing loan problem.
From a symbolic perspective, this is a very important election for Japan as a victory for Koizumi and the coalition would be the most powerful signal yet that the economic model in Japan will change. Ultimately the economic cycle will prove a more significant driver of share prices.
Mitsubishi UFJ is aware it lacks investment-banking scale and is trying hard to grow, ... If this doesn't meet expectations, I would not be surprised if they decided to go down the acquisition trail.
We expect to see some acceleration in recovery in areas like downtown Tokyo. This seems like a sensible time for strong-balance-sheet real estate companies to take what could be a golden opportunity.