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Are Japan stocks a bargain yet?

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Global market turmoil pushed Japan stocks into correction territory Thursday, raising questions over whether this is an attractive entry point for longer-term investors.

The Topix is down 11 percent from its six-year peak on September 25, while the Nikkei 225 is down 10 percent over. Both indexes slumped around 2 percent on Thursday, following the selloff in U.S. markets overnight amid intensifying concerns over a sputtering global economy.

"Stay short for now," Amir Anvarzadeh, analyst at financial services firm BGC Partners told CNBC on Thursday. "We see the current downtrend continuing for the next 1-2 months."

There are concerns that Japanese officials have stopped talking the yen down, he said, and until the yen finds a footing again, any bounce will be a "dead cat ".

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Earlier this month, Bank of Japan Governor Haruhiko Kuroda said the central bank is closely monitoring the exchange rate and Prime Minister Shinzo Abe said yen weakness is hurting small companies and households.

The yen has appreciated 2 percent against the U.S. dollar in the past week largely supported by safe-haven bids in the risk-off environment. The yen is inversely correlated with the Nikkei, which is heavy of exporters.

On top of this, there is uncertainty about whether the government will go ahead with its second consumption tax hike – to 10 percent from 8 percent – next year, said Anvarzadeh, which he believes would be "disastrous" for the economy.

What about earnings?

Next week, Japanese corporates will begin reporting third quarter earnings, which are expected to be encouraging. However, this will not be enough to turn the market around, say strategists.

"Earnings should be good but they are a reflection of the past three months. So if the broader sentiment is negative about future growth, the market is going to ignore earnings," Anvarzadeh said.

Read MoreYen is 'not excessively' weak: BoJ's Kuroda

While valuations look more attractive, it doesn't matter right now because they are based on forecasted earnings which could change drastically if the global economy slows, he added.

Jun Yunoki, equity strategist at Nomura agrees earnings won't be enough to revive for the market.

"The problem is, the next catalyst for Japanese equities is unclear at the moment," Yunoki told CNBC. "We see the market moving sideways for the next month or so."

Nevertheless, for investors with a long-term horizon, it's a good time to start investing, he said, noting that the market is likely to end the higher much higher than current levels.

December could be key

Yunoki, who forecasts the Nikkei 225 will rise 15 percent to 17,000 by end-2015, says December will be a positive month for the market.

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Foreign buying tends to increase at the end of December, he said. In addition to this, there could be a rush of retail investors into the market to take advantage of the recently introduced tax-free investment program.

In June, the government introduced the tax-free Nippon Individual Savings Account (NISA) to encourage an estimated $8 trillion in individual savings into investments including stocks and mutual funds. The program exempts investors from taxation on dividends and capital gains on investments worth up to 1 million yen a year in stocks and investment trusts.

"Not all the people who opened these accounts have started to invest yet, so there will be a rush." he said.

In addition to this, the Government Pension Investment Fund (GPIF) is likely to announce its new asset allocation strategy by December, he said, which is expected see the giant fund increase buying of Tokyo stocks and cut its Japanese government bond weighting.