Abenomics raises hopes for Japanese equities

Japan_equitiesThe reforms of Japanese leader Shinzo Abe have emboldened equity investors to take overweight positions in Tokyo-listed equities. Columbia Threadneedle Investments changed its view of Japanese equities to “strongly favour” and raised its allocation, which was already overweight. “Despite a stellar 20% total year-to-date return (in excess of global equity returns, in dollar terms), Japanese stocks continue to trade at a discount to global stock indices,” said Toby Nangle and Maya Bhandari from the company's multi-asset team. Abe's election win makes it likely that Haruhiko Kuroda will be installed for a second term as governor of the Bank of Japan, they said. His second term is expected to reassure markets. Katsunori Kitakura, lead strategist at Japanese asset manager Sumi Trust, was also optimistic about equity returns. “We expect the stock market to remain steady in 2018, driven by key drivers including further progress in structural reforms under a highly stable political environment in Japan, continued monetary easing and stable exchange rate movements,” he said. ©2017 funds global asia

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