This morning the EWJ, which is the Japan ETF that trades on the AMEX in USD, is going to have another rocket launch at the open. It'll be just like Monday, Tuesday, and (especially) yesterday.

On Friday, the Japanese GDP report will be out, which will in all likelihood show that the economic picture is improving quickly.

As I think the Japanese capital markets and currency will continue to strengthen, I therefore have to upgrade my outlook, which has been marginally bearish, to one where I am now bullish.

What could dim that positive outlook would be for the Yen, which is presently 110.24 this morning " and expected to move to 109 soon " continues to strengthen to the 105 level or stronger. A stronger Yen would help pay for higher priced oil, but would surely hurt the important Japanese export industry.

For now though, Japan is flying high. I have changed my outlook to a belief that Japan will relatively outperform the U.S. and European markets for the balance of this year.

One of the key factors in my assessment is the People's Bank of China currency move, where Mr Joe (Zhou Xiaochuan) is rebalancing his currency basket along the lines of the China trade with USA, Europe (almost equal) and Japan (not far behind), and Foreign Direct Investment balances.

On Friday, the U.S. international trade numbers are also expected to weaken the USD further. So by the end of this week, I think Japan is going to be in relatively better shape than the U.S. The capital markets in the U.S., in fact, will soon be facing more lifting of interest rates and bond yields that will try to put some support under a falling USD.

If what I see on the near horizon plays out, let's say that Kudlow won't be too happy. But then again, maybe he'll buy your U.S. real estate stocks, financials and techs, USD, U.S. bonds, and so forth. And with the proceeds, maybe you'll want to buy a little Japan (and Canada and Australia and Brazil), and gold.

So, remember; it's going to be popping champagne corks this morning for the owners of EWJ.