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.
2019 has been a stellar year for global bond markets, as weak global economic growth and low inflation have combined with ever more accommodative central banks to push global bond yields significantly lower.
Central banks to keep borrowing costs low
Recession due but will be relatively mild
Why are investors just not that into Japan?
Japanese stocks have lagged their global peers so far this year, as uncertainty over US-China trade frictions and the impact on the global economy have clouded the outlook for corporate earnings.
The policies and programmes that could protect a worldwide plunge
In an environment where no region presents an obvious opportunity from a valuation perspective in 2019, Japan offers investors the best chance to at least get access to a major market at something of a discount.
In the developed world, inflation expectation is noise
The Japanese equity market has seen net outflows in the past 12 months, with concerns over global growth and the trade war weighing on investor sentiment in the region.
Maintaining overweight position to the region
Japanese equities have been routinely shunned by global allocators for decades.
Attractive dividend yields
Economic surplurses also pose risks
The Japanese equity market will resume its ascent, buoyed by favourable political conditions, strong and evolving corporate reforms and continued monetary easing by the Bank of Japan (BoJ).
Navigating a volatile market
How have they performed this summer?
Following Shinzo Abe's re-election as Prime Minister in 2012 and the infamous 'three arrow' stimulus package, the Japanese equity market was a star performer among the world's stock markets in 2013.
Gold prices set to soar
Global markets have fluctuated since the end of 2017, due to the Federal Reserve's accelerated tightening, trade frictions and European political risks.
Japanese GDP is likely to expand an average 1.7% through March 2019. Growth should be about 1.6% in April through December this year, rising to 1.8% next January through March.
It has begun. Prime Minister Shinzo Abe has started the process to reappoint Haruhiko Kuroda as governor of the Bank of Japan (BoJ) by submitting a request to the Japanese Diet.
Japanese equity markets have been tested by global market volatility so far this year.