Elated at the U.S. economic pickup, investors are opting for shares backed by favorable earnings prospects.

Still, while the U.S. economy is undeniably improving, skeptics see a slow recovery.

Judging from the recent U.S. corporate earnings reports for the January-March quarter, they fear profit falls have yet to be factored into New York stock prices.

As demonstrated by yield spreads, or differences between dividend yields on stocks and long-term interest rates, however, New York share prices have fallen to reasonable levels.

In other words, the New York market is highly likely to reach a turning point.

In Japan, the release of earnings reports by firms closing their books in March is gathering steam, and investors are already buying issues expected to show rapid earnings improvements. For example, electronic components makers are setting recovery highs because their better-than-expected performances can be confirmed by monthly orders received.

Although a bottoming-out of the world economy and a pickup in corporate earnings have been witnessed for some time, investors still appear reluctant to appreciate them as they are. But as they are starting to buy issues whose improved earnings are confirmed or about to be, it is fair to say the Tokyo stock market is on the threshold of uptrends led by favorable corporate earnings.