Wealth managers poised to buy Japan on post-election hopes

The election of Shinzō Abe as Japanese prime minister could be the catalyst for the region to outperform after years of flagging returns, prompting asset allocators to review their underweight exposure to the country.

Liberal Democratic Party of Japan (LDP) leader Abe has voiced his intention to force the Bank of Japan into a more aggressive monetary policy and target an inflation rate of 3% if elected in snap elections in December. Markets have responded well with the Nikkei 225 up 3.95% over the past month, compared to the FTSE 100’s loss of 1.84% and the S&P 500 down 2.94%. The leadership contest, as well as other factors, has caused Jim O’Neill, chairman of Goldman Sachs Asset Management, to say Japan’s “moment is here”. “The 3% inflation target is the sort of thing many were advising Japan ...