Is Japanese stock too cheap to buy?

The entire Japanese stock market is left trading close to book value at levels, in real terms, equating to where it traded in the early 1970s.

I remembered at the beginning of this year, some investors already paid attention to cheap Japanese market on the Journal. But the truth is, it never stop heading south in the entire 2008.
Nikki reached its nominal all-time high of 38,957 in December 1989; it closed on Oct. 21 at 9306, 76% down from the peak and just 800 points or so north of its 2003 low.

An interesting point is that Japan, of course, knows what it's like to go through a credit crisis and a vicious deleveraging -- and it’s had two decades to reconfigure itself into a viable post-crisis economy. Which is not to say that Japanese stocks are a screaming buy right now, but which is to say that if you think that stocks in the US are cheap, maybe you could look across the Pacific and find some equally-attractive assets which are even cheaper. Or, to put it another way, the lesson of Japan is that even cheap stocks can continue to decline for decades.

I will keep eyes on Japanese stocks anyway. Japan's companies are well-run, and its financial institutions, as we saw with the MUFG deal, are today more part of the solution than they are part of the problem.