Asia

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

Managers Harker and Edwards break from 2008 position to outperform Japan peer group

Since March this year the Asia Pacific markets have rallied strongly, as investors anticipated that loose monetary policy and government stimulus packages would be enough to trigger a recovery.

Japan's economy expanded 0.9% in the second quarter compared to the previous one, lifting hopes that it may be recovering after four quarters of contraction.

Recent years have not been kind to the Japanese stock market.

Global equities soared over the second quarter. Although the gains were broad-based around the world, emerging markets, and in particular Asia, outperformed developed markets as investors realised that their fundamentals remained strong throughout the...

What started as a valuation-driven rebound following the excessive de-rating of Asian equities in late 2008 has generated additional momentum on the back of more compelling evidence of an economic turnaround.