CAUTION is the sentiment frequently expressed by followers of Japanese stocks, although some analysts believe the Tokyo market offers bargains at its present levels.
Mr Peter Everington, managing director of Regent Fund Management, said he was ''widely bullish'' about the Nikkei's future movements and said it was a good time to buy Japanese equities, as the market had fallen to around 63 per cent from its high in 1989.
''The Japanese Government, the Bank of Japan and the Ministry of Finance will initiate a series of fiscal and monetary stimulants this year,'' he said. ''This will mean an increase in money supply, falling short-and long-term interest rates, which will result in increased domestic liquidity, and an export-led recovery.'' He said the Japanese market would show signs of recovery in the fourth quarter of 1993 or the first quarter of 1994.
''The Japanese stock market is now worth 12 times the Hongkong stock market, but it should be worth 40 to 50 times that with Japan's population and per capita income levels,'' Mr Everington said. ''Either Japan is super cheap or Hongkong is super expensive.'' He said investors should stay clear of banking stocks but recommended technology companies that manufacture laptop computers for sale in Japan and the United States.
However other analysts exuded caution.
Mr Mark White, director of Jardine Fleming Holdings Hongkong, advised investors to, ''nibble at Japanese stocks, but take it gently as the Japanese economy is still not out of the woods''.