It's well-documented that markets operate in long (secular) cycles. Two-decade-long bull markets are often followed by bear markets that are nearly as long. While Japan's Nikkei index is about 16 years removed from its December 1989 peak, it's still well up from its 20-year lows hit in April 2003. Despite the upswing since 2003, I think investment opportunities still can be had in the Japanese stock market, because not all companies have participated in the upswing yet.

Some of them, like household products maker Kao, can only be had on the Pink Sheets in the U.S., but others such as conglomerate Konami (NYSE:KNM), automaker Honda (NYSE:HMC), and banker Mitsubishi UFJ Financial Group (NYSE:MTU) have American Depositary Receipts (ADRs) that trade on major U.S. exchanges.

Another company, Matsushita (NYSE:MC), which is better known for its Panasonic consumer electonics business in the U.S., also has a strong electronics business back home, in addition to communications and appliance businesses. Matsushita is easy for U.S. investors to invest in via ADRs, and while its business has been sluggish of late, last Friday's earnings announcement demonstrates that the company has made solid progress on cutting costs.

Sales for Matsushita were essentially flat, but because the company has been eating away at its cost structure, it turned in an operating profit 9% higher than last year. In turn, earnings per share came in a bit stronger with an 18.8% gain, which was largely driven by the company's ongoing share repurchase program. While greater gains may seem possible in the second half of the year, the company is expecting gains similar to the first half due to softness in the global economy.

As Matsushita's opportunities for outright growth aren't huge, the company is focused on returning value to shareholders through its share repurchase plan and increases in its dividend. In keeping with this focus, the company said in its press release that it is increasing its interim dividend by 33% to 10 yen per share (approximately $0.09). This dividend, along with another 10 yen per share expected at the end of the year, works out to a 1% yield. While currently small compared to those available from other high-income opportunities, Matsushita's dividend yield will likely increase further if its business improves to match its expense reductions.

International investing, which includes Japanese stocks, is an important component of any well-diversified portfolio. Foreign stocks afford investors exposure to economic growth outside of the U.S., plus provide a hedge against a declining U.S. dollar, which is a significant risk given the deficits and trade imbalances that we're experiencing here in the U.S. While Matsushita isn't my favorite opportunity for international diversification -- I find Toyota Motor (NYSE:TM) and Kao a bit more interesting -- it's on my watch list and is a company that I think investors may want to pay attention to.

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Nathan Parmelee has no financial stake in any of the companies mentioned. The Motley Fool has an ironclad disclosure policy.