Why Japanese equities will be on the up from next year

Japanese equities have been sensitive to weaker global industrial demand over the past 12 months, but we expect the earnings impact from the ongoing slowdown to bottom out by the end of this fiscal year.

Into the new year, consensus expectations forecast aggregate earnings growth of 6%, supported by a broad-based recovery in industrial demand. Having underperformed other developed markets, valuations remain attractive as the TOPIX trades at a P/E lower than its historical average and significantly lower than that of both US and Europe.  The innovative companies diffusing Japan's demographic time bomb Japanese equities have suffered collateral damage through the ongoing stand-off between the US and China. However, recent developments in negotiations on tariffs have been more prom...