We got one of the biggest rallies in years for uranium stocks yesterday.

Producers like Cameco jumped over 8% on the day. Spurred by news that Japan is officially sticking with nuclear as part of its energy mix.

The Japanese government released a draft of its final energy policy plan. Noting that nuclear should continue to be the country's "key base-load power source" for the next 20 years.

The move comes after some suggestion lately that Japan may try to move away from nuclear. Following protests against atomic energy in the country.

The most interesting thing was the size and speed of the gains in stocks following the news. In short, it appeared investors are now looking for any reason to get excited about the uranium sector.

In fact, the Japanese news was in many ways a non-event. The government made nearly the exact same statements about nuclear in a draft energy plan in December. And even the final plan doesn't commit to any hard targets on nuclear power quotas or timing on reactor re-starts around the country.

Nonetheless, uranium stocks responded in a major way. Suggesting this is simply a space whose time is coming around.

In the boom-and-bust resource cycle there's a period where things usually become so bleak that investors start looking for any reason to become optimistic. We've now hit that point in uranium. Where there's been so little to cheer about for almost three years.

Investors are sensing there's a good story shaping up here. With supply-demand fundamentals running the tightest of any metal. And prices sitting at ultra-low levels, where some appreciation is almost certainly required in order to maintain even a basic amount of mine production.

Amid such a situation, it's natural for people to start looking for reasons to turn bullish. They found one yesterday--and there will undoubtedly be more coming.

Here's to the full cycle,

By Dave Forest

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