Managers of funds investing in Japan are still confident about the market's potential - despite a quiet few months.
In March the Japanese government ended its policy of 'quantitative easing' - which was designed to support the economy - and in July interest rates in the country rose for the first time in six years.
These two actions saw the Nikkei - which had risen 20 per cent in the six months to April - fall for two months before recovering modestly.
Between April and June no Japanese index delivered a positive return, Standard and Poor's (S&P) points out.
The large-cap S& P Topix 150 index fell the least at 6.9 per cent, while the Japanese technology index JASDAQ fell more than any other index - at 19 per cent.
But Standard & Poor's Fund Services reveals that experts in the market are not too bothered about this.
S&P highlights Rob Weatherston at Merrill Lynch, who expects the combination of cheaply available finance, strong earnings and undemanding valuations to lead to good stock market gains in 2006.
He sees the recent sell-off as unjustified and is happy to invest at current market levels.
Nathan Gibbs, who manages the Schroder Japan Alpha Plus Fund, is also positive S&P points out.
Mr Gibbs believes share prices have now fully taken account of July's interest rate rise, and does not think there will be another until 2007.
If rates do stay low and companies revise their conservative forecasts, he expects a recovery in Japanese equities.