Company-specific factors the key to earnings growth going forward

JAPAN

European sovereign concerns came back to the fore while Japan celebrated its Golden Week (end of April into early May).

These sovereign debt fears increased volatility and contagion woes across most markets and halted a strong run by the Topix, which as of 11 May was up 13.4% year to date. The index, flat for the month of April, surged by over 9% in March alone, outperforming most major markets. The Tokyo-specific tailwind at the time was provided by the yen, which weakened by 5% during the month. With the Japanese equity market rallying significantly since mid-February, valuations are once again looking less compelling. Furthermore, with the Fed having reiterated its intent to keep interest rates as ...