Investors pushed Japanese shares up more than 50 percent last year on hopes that Abenomics, or the around one-year-old plan from Japanese Prime Minister Shinzo Abe, will kick-start Japan's long-moribund economy out of its decades-long struggle against the pressures of deflation.
But while Japanese markets have disappointed high hopes so far this year, with the Nikkei shedding around 8 percent year-to-date, analysts are sticking with expectations for continued gains, albeit at a slower pace.
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"You're starting to see the secondary effects of Abenomics," he added. As an example, he noted efforts to get more women into the workforce, a key plank of Abenomics, has resulted in rising cosmetic sales.
In addition, he noted efforts to legalize gaming, possibly coming as soon as this year, are likely to provide a significant economic boost, potentially creating a $40-billion-a-year market.
"Obviously, Mrs. Watanabe will want to go play a few games," he said.
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Others are also sticking with tempered optimism.
"Abenomics may not be meeting its original expectations of consistent growth," said Wells Fargo Private Bank in a note, citing data showing economic growth came in below expectations in the fourth quarter of 2013. But it views the recent data as a "short-term misstep."
"It may be disconcerting to some investors that the Japanese economy has recently hit a soft patch. However, we anticipate that the Bank of Japan (BOJ) may provide support to equity prices through additional stimulus measures" if economic data don't show improvements, Wells Fargo said.