Asia

Polar Capital's James Salter reflects on the outlook for the Japanese stock market under new Prime Minister, Yukio Hatoyama

It appears memories of the fateful events of 12 months ago have faded fast. Consumer confidence is improving, some major economies have started to recover, and some banks are paying big bonuses again. It is as if we have awoken after a bad dream.

So, the Liberal Democratic Party (LDP) is gone. The dominant party in Japanese politics since its founding in 1955 was humiliated in the recent Lower House election, and faces the prospect of a sustained period out of power for the first time in its history....

Despite a short-term correction in Chinese A Shares, the medium- and longer-term outlook is robust.

More than five decades of rule by the Liberal Democrat Party in Japan has come to an end.

Asian region regains investor confidence after sharp falls, supported by continuing growth and Chinese fiscal stimulus boosting sector's economy

The Japanese market has benefited from the improvement in investor confidence we have seen in recent months, although the weakness of the yen this year has been a negative for sterling-based investors (a reversal of the picture in 2008).

Following a 70% rally from the lows of March, Asian equities' outperformance gap versus the rest of the world has widened even further, resulting in 31% outperformance for the first seven months of the year.

Japanese Smaller Companies sector makes gains of 25.4% over the last year