They say every dog has its day. In the case of George Soros and some of his money-management people, that dog has long been Japan. I can’t recall how many times over the years he and some of his colleagues told me the Japanese market was ready to roar. That roar, though, frequently turned out to be a squeak.

Now, though, Mr. Soros’s day to shine in Japan if he so wishes may be close at hand. In any case, I’m told, Japan should be on your investment radar screen.

In a chat the other day, Standard & Poor’s chief economist, David Wyss, told me the much-battered Japanese stock market – which has lost more than two-thirds of its value since 1987 – is looking better now than at any time in the last 10 years. “It’s time to start nibbling,” he says.

A deadbeat this year with a measly gain of about 1% (as seen in the Topix 150 Index), the Japanese market, Mr. Wyss figures, should wrap up 2004 with a high single-digit increase – a pickup he expects to spill over into 2005.

The catalyst is a perkier Japanese economy, which our economist sees producing 2004 GDP growth of 4.5%, versus a 2.5% gain last year, and another 2.5% rise in 2005.

“This is the first time we have seen a growth spurt [in Japan] supported by more than just government spending,” Mr. Wyss says. He points, in particular, to increased domestic demand for consumer goods, more vigor in capital equipment sales, and big growth in exports, especially to China (which are up more than 160% over the past four years).

Undervaluation – in terms of worldwide market capitalization – is another reason he’s gung ho on Japan. As the world’s second-largest economy after America, Japan represents 18% of the global domestic product but only 8% of global equity market capitalization.

Scudder Investments, which operates the Japan Fund, understandably, is also pitching the Japanese market. In some promotional material, it cites what it believes are several legitimate reasons for stepped-up enthusiasm for this market. For starters, it, too, points to ballooning exports to China. As for talk of a China slowdown, Scudder – pointing to numerous Chinese infrastructure projects in the works, such as preparation for the Bejing Olympics in 2008 and more than 15,000 different highway development programs that will add more than 100,000 miles of road – believes that the slowdown talk is overdone. In other words, the China connection remains a very viable one for Japan.

A couple of other catalysts, according to Scudder, are increased business confidence and government reform, notably the country’s willingness to keep money flowing to many insolvent banks and to spur a consolidation of the banking industry. Yet another plus: a brighter employment picture.

OK, let’s say you buy the idea that you ought to put some money to work in Japanese stocks, which sport an average price-earnings multiple of around 17, the lowest in 30 years. What’s the best strategy?

Because the Japanese market is highly volatile, S &P recommends a small allocation, say 5% of your portfolio. One of its top picks is iShares MSCI Index Fund, an exchange-traded fund, which is designed to emulate the performance of the MSCI Japan Index. (The index trades like a stock and must be purchased through a broker).

S &P also favors several stock funds, namely Fidelity Japanese Smaller Cos., Japan Fund, and Matthews Japan. Mr. Wyss especially favors smaller stocks, noting they’re the chief out performers when the market starts to pick up.

Jay Talbot, who manages the Japan Fund and lives in Tokyo, notes that corporate fundamentals in Japan continue to improve, as evidenced by rising profit margins and the elimination of excess debt. Further, improvements in corporate earnings and cash flow point toward healthy growth in capital expenditures. While the fund’s holdings include many of Japan’s worldwide brands, like Toyota, Fuji, and Honda, lesser-known companies, such as Yamato Transportation and retailer Shimachu, are also conspicuous.

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Sure Thing!: If there was any thought the financial markets might escape an interest-rate hike at Wednesday’s Federal Open Market Committee meeting of the Federal Reserve, Friday’s disclosure of a better-than-expected October jobs report pretty much scotched such a possibility.

That’s the view of most pros, who consider an increase in the Federal Funds rate to 2% from its current 1.75% as a sure thing. The chief investment strategist of fixed income at Legg Mason, Sharon Stark, sums it up. “A rate hike is now a foregone conclusion,” she told me. She also sees additional boosts, which should raise the FF rate to 3%-3.5% by the end of next year.