This article provides a brief review of the latest trends in the Japanese market. Overall, we expect yen depreciation to continue in the next weeks. There is a strong psychological barrier at the $1/¥100 level, which is constantly being challenged. Unless there is a sudden positive macroeconomic announcement in the next weeks, we believe this barrier will persist.

Macroeconomy

No inflation so far: The biggest announcement last week was the March CPI data release, where the core price index fell 0.5% year to year. Considering that the Bank of Japan has a target of 2% by 2015, the need to at least continue the quantitative easing program at the same pace for the next months is evident.

Early signs of inflation: Although prices continue decreasing, the rate of change is rising, which reflects the short-term effect of Abenomics. The Bank of Japan states:

The three-month rate of change

In a recent article I discussed that, in addition to affordability, the introduction of plain packaging in Australia is a threat to the tobacco industry. It now transpires that the European Union is considering a watered-down version of the same with graphic images and warnings of the dangers of smoking taking up 75 percent of cigarette packets, while individual states will be allowed to introduce plain package legislation.

And this is not the end for Europe. Russia, the largest tobacco market after China, is considering legislation which may see tobacco advertising be outlawed and smoking in public places such as restaurants, bars and hotels been phased out. It will also ban kiosks and outlets in stations from selling cigarettes. If passed, the restrictions will be phased in and are expected to be fully in force by 2016.

At this junction, it is good to remind

Just four tobacco companies control approximately 75% of the world's cigarette market. After Philip Morris International (PM), British American Tobacco (BTI) is the second-largest cigarette company by sales outside China- which is the world's largest cigarette market and closely controlled by the state-owned China National Tobacco Company.

Like their international competitors (including Philip Morris International, Japan Tobacco International (JAPAF.PK) and Swedish Match (SWMAY.PK)) both London-listed British American Tobacco and Imperial Tobacco (ITYBF.PK) have not been immune from tough economies, anti-smoking campaigns, increasing regulation, price wars, increases in excise taxes and higher unemployment rates. These have pushed increasing numbers of smokers to give up smoking altogether or switch to cheaper - and increasingly illicit - cigarettes. All this is unlikely to change in the near future.

Until now, even as tobacco consumption is in decline in much of the developed world, tobacco companies have

Tobacco market

Growing smoking populations in China and other large-population developing markets, plus the pricing strength of international brands has kept the world tobacco market robust. This is in spite of falling cigarette volumes in many developed markets.

According to Euromonitor International, world tobacco sales were worth some US$740 billion in 2011, about 11% more than in 2010. The global cigarette market increased its value by double digits despite only growing marginally in volume. The achieved global growth was due almost entirely to China which accounted for over 40% of global volume cigarette consumption in 2011. China delivered growth of some 4% which translates to almost 90 billion sticks worth of additional sales - more than all but the 10 largest cigarette markets consumed.

Pricing strength continues

Pricing strength in cigarettes was the driver of global tobacco market robustness and of the financial strength of the industry and its

Philip Morris International (PM), Altria (MO), and Kraft (KFT) - three dominating staples stocks. How kind Altria has been to its shareholders: Not only a strong stock performance by big MO but the welcome addition of the Philip Morris International and Kraft spin-offs.

Remarkably, there is another tobacco-food-and-beverage conglomerate that looks very much like the old Altria. That company is Japan Tobacco (JAPAF.PK). It could easily split into four parts to unlock value.

Most people know Japan Tobacco for its tobacco. Few realize the company has a huge beverage and food business. Believe it or not, Japan Tobacco has a pharmaceutical business with multiple drugs in the pipeline for the treatment of HIV, hyperlipidemia, and auto-immune diseases.

The other divisions are so under the radar Japan Tobacco doesn't even mention them on their web site when you click on their products and brands.

While they are buried under the domestic

While profits and losses are part of all investing and trading strategies, leverage and margin significantly increase the risk/reward of an investment over the short term and long term.

Phillip Morris International (PM) has been one of the strongest-performing dividend stocks in the market over the last several years.

I've written several bullish articles on Phillip Morris since the stock was in the mid-$80s. Still, I think the significant and recent deterioration of the EU economy will likely continue to challenge the company in the next year.

Philip Morris is in nearly every region of the world, but the company's biggest markets are Asia and Europe. It gets 40% of its revenues from Europe, and nearly 35% of its revenues from Asia. The company has revenues of around $30 billion a year, free cash flow of $9 billion, and long-term debt of $20 billion. The company's debt-to-equity ratio is over

It is always interesting to see how the most popular and well-covered stocks are performing. While often times popular stocks are strong performers, sometimes the best value is in markets that investors don't frequently pay as much attention to.

Few sectors or stocks have been more popular than dividend stocks over the last several years. With cyclical companies such as Boeing (BA), GE (GE), and Caterpillar (CAT), offering minimal returns in the last decade, investors have turned to more stabile companies with strong and consistent dividend records.

(www.thestreet.com)

Tobacco companies have consistently been some of the most popular dividend stocks over the last several years. While Altria (MO), Reynolds (RAI) and Lorillard (LO) are the most popular U.S. tobacco companies, international tobacco companies such as Phillip Morris International (PM) and British Tobacco are very popular as well.

I've been positive on tobacco stocks from some time, writing that

We were pleased to get a positive reception on our previous reports about Philip Morris International (PM). We have held a long position in Philip Morris International since March 31, 1999, when it (and Kraft Foods (KFT)) was both part of the Philip Morris Companies (MO) and we have been pleased with the results of the company and its spin-offs during this time. We believe that Philip Morris International is a great investment, as it one of those rare-breeds of companies that offers an above average dividend yield of 3.5% (as of July 23rd, 2012) and is a dividend growth champion (Dividends have increased at a compounded annual growth rate of 13.75% since it was spun off from Altria Group). We decided to review its recent Q2 2012 earnings report.

Source: Philip Morris International's Dividend Schedule and History

PM faced difficult macroeconomic headwinds as well as a challenging

Last week we wondered whether or not shares of Keryx Pharmaceuticals (KERX) were heading for the dollar mark. This week, it's a whole new ballgame as a Monday morning press release issued by Keryx informed investors that Japanese partner, Japan Tobacco Inc. (JAPAF.PK) and Torii Pharmaceutical Co., Ltd. (Torii), had announced positive top line results of a Phase III trial for Zerenex in the treatment of hyperphosphatemia in end-stage renal disease patients on hemodialysis.

As a result of the news KERX shares were up by more than 25% on volume of well more than double the daily norm - all before lunch time on Monday.

Keryx opened the month on a severe downturn after Phase III trials for the cancer treatment Perifisone failed. With Perifisone out of the picture, at least for the time beings, investors looked to Zerenex as the next key catalyst that could

Keryx Biopharmaceuticals (KERX) is typical of the volatile biotech sector. It recently lost almost two thirds of its value when it announced that its Perifosine (KRX-0401) X-PECT Phase III Clinical Trial did not meet the requirements necessary to be approved for marketing. However, it still has several drugs in development, some recent possible catalysts and a solid balance sheet. I believe it should be considered as a good high risk/high reward play for aggressive investors.

Key Recent Events

• It announced positive news on its phase III drug, Zerenex on Monday.
• 5 insiders have bought new shares in April.
• Last week's announcement that Human Genome Sciences (HGSI) spurning GlaxoSmithKline's (GSX) for almost twice its current market value, shows M&A is active in the biotech sector and how much Big Pharma will pay up to fill its dwindling organic pipeline.

4 additional reasons Keryx could provide a "home run" at $1.70

If you can get past any social or moral issues, "sin" stocks are useful as components of an income oriented investment strategy. Tobacco companies, and international ones in particular, are core "sin" stocks.

There are a variety of local national tobacco companies in countries around the world, but only four working outside of the U.S. that are readily accessible to U.S. investors, or for most investors for that matter. They are Philip Morris International (PM), British American Tobacco (BTI), Imperial Tobacco (ITYBY.PK), and Japan Tobacco (JAPAF.PK).

We have owned PM in the past -- don't right now, but may again at some point. There are some attractive features to the other companies as well.

"Sin" Stocks:

We like "sin" stocks, as they are often called, particularly in depressed economic times. People savor their cigarettes and beer when times are tough.

Cigarettes are a

Philip Morris (PM) competes with U.S. domestic tobacco plays for investor dollars. Do you allot your cigarette stock buys to Philip Morris or to Altria (MO), Reynolds American (RAI), or Lorillard (LO)? Buy the growth-charged Philip Morris or go with Vector Group's (VGR) giant dividend checks each quarter?

In short, Philip Morris needs to win the hearts and wallets of its American fan base, the primary buyers of U.S. Tobacco stocks. Investor have ample reasons to pick Philip Morris over domestic tobacco: growth, more conservative payouts, and well-timed, robust buybacks.

So what? Philip Morris does not compete with any other American company. Just about every article forgets that fact, and ignores the real competition.

Philip Morris doesn't sell anything here in the U.S. - not a single smoke. Reynolds American and Altria don't try to outsell them; they

Philip Morris International (PM), the world’s leading international tobacco company outside of the U.S. and China will release its Q3 earnings on Thursday. While the Asian markets will provide it organic sales growth, European sales are likely to continue declining. Yet, its dominant market share in the premium segment will provide significant room for higher pricing, especially in Europe that will help maintain operating margins despite flat global cigarette shipment volume. PMI’s product portfolio boasts 8 of the world’s top 15 brands including Marlboro, the number one cigarette brand worldwide. Until a spin-off in 2008, Philip Morris International was an operating company of the Altria Group (MO). Philip Morris International competes with British American Tobacco (BTI), Japan Tobacco (ITYBF.PK) and Imperial Tobacco Group plc (ITYBY.PK) in its various geographical segments.

See our complete analysis of Philip Morris International

Last quarter, PMI’s growth was largely driven by double digit growths