Japan set to feel brunt of global economies undershooting growth expectations

Japan remains a cyclical market due to its large exposure to global manufacturing sectors relative to other major markets, as well as relative to its own economy.

However, another good year for Japanese equities in 2016 is anticipated, given a sustained structural recovery in corporate fundamentals. December's Bank of Japan quarterly Tankan survey results support this confidence - business sentiment is firmer than the market's expectations, while their fiscal-year 2015 profit and capex forecasts are higher than expected. The Japanese economy is undergoing major change after more than a decade of deflation, and the areas in which Japan may be strong in the future may not be the same as in the past. Japan has traditionally been renowned for it...