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Cramer: Trading on Japan is 'frequent and mistaken'

Monday, 12 Aug 2013 | 10:36 AM ET
Cramer: Trading on Japan is 'mistaken'
Monday, 12 Aug 2013 | 9:01 AM ET
Traders should look past Japan to more important economies, like the U.S., Europe and China, Cramer said Monday.

Markets reacted negatively to missed expectations in Japanese economic data, but CNBC's Jim Cramer said that investors are too focused on events in the country and should be concentrating on other areas that are more economically important and showing positive signs.

"This overpropensity to look at Japan is nuts," Cramer said on "Squawk on the Street" on Monday. "Listen, China is far more important and Europe is far more important in the sense of all of that data we've been getting."

(Related: Japan misses growth forecast in the second quarter)

"Those who are trading off Japan: That has been a frequent and mistaken trade," he said. "It tends not to last past 11 or 11:30 in the morning."

Cramer explained that the global economy is driven by the United States, Europe and China, and developments in Japan shouldn't be overemphasized. The country's radical monetary policy—which is routinely referred to as "Abenomics"—is simply an experiment, Cramer said.

He added that Japanese companies outside of the auto industry have "given up" after finding it difficult to create value.

"I don't want to overemphasize Japan because you're liable to miss the big picture," he said, which includes better numbers from Europe and China.

(Related: Greek economy improves, bailout questions remain)

Cramer pointed to several individual companies that he likes in those areas, including European financial companies Banco Santander and Banco Bilbao Vizcaya Argentaria.

"I just think that we should stay focused on Europe … Japan is just an experiment," Cramer added. "The industrials continue to power higher, including industrials that don't even have good numbers. That is because there is an expectation of a return to Europe, not because of Japan."

—By CNBC's Paul Toscano. Follow him on Twitter and get the latest stories from "Squawk on the Street" @ToscanoPaul

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