Tokyo stocks have been unstable since the start of the year apparently in reaction to overheated buying of information and communications issues in December and a resultant rise in prices of value stocks, or stocks of low price-to-earnings ratios.

The market is also being affected by the roller-coaster moves of U.S. stocks since the beginning of the year.

Some market insiders say investors should pay greater attention to value stocks as buying interest is expected to continue spreading along a broad front.

But their view is questionable for two reasons.

First, while value stocks usually perform strongly during an economic recovery, Japan's economy is at a complete standstill.

It is fair to say the economy will not stage a full-scale recovery until after 2001.

Second, value stocks are often used for cross-shareholding ties and are expected to be dumped toward the end of the current fiscal year.

The current rebound of value stocks therefore is a temporary phenomenon following their steep falls last year.

Investors should shun value issues except those that have effective restructuring and management plans.

While market participants are split over how to assess information and communications issues, they can take a cue from the U.S. market.

Specifically, because information and high-technology issues outperformed the overall stock market in the United States in the 1990s, it is premature to conclude that rising trends of such stocks have already come to an end in Japan on the grounds that the nation's information revolution began in 1999.

The current market should be considered a healthy correction following the sharp price rises of information stocks.

Investors therefore should steadily purchase them on decline as such an investment stance will eventually help them outperform the market.