Why the party is not over for Japan

ON ASSET ALLOCATION

All boats rose with the tide during last year's Japan rally. Although many investors have now taken profits, the party is not over and a more focused approach means Japanese equity investors can rally on, argues T. Bailey's Peter Askew.

After better-than-expected performance by developed market equities last year, many investors are likely to have entered 2014 cautiously hopeful of single digit returns. With inflation continuing to undershoot central bankers’ targets, investors may be hoping for a respectable return over the year in real terms. The first quarter was, in overall terms, mildly positive for developed markets and mildly negative for their emerging counterparts. However this broad brush view masks significant oscillations in returns on a monthly and intra-monthly basis, both by markets and by individua...