Gerard Lane, Norwich Union investment strategist, said: ¿There are many reasons to look favourably on Japanese equities and, certainly in the short-term, the recent sell-off has presented a trading opportunity to buy the asset class. "
Gerard Lane, Norwich Union investment strategist, said: “There are many reasons to look favourably on Japanese equities and, certainly in the short-term, the recent sell-off has presented a trading opportunity to buy the asset class.
“However, valuations still looked stretched against other countries. Alongside moderating global economic growth, highly cyclical markets such as Japan look less appealing until the markets become cheaper and the global economic outlook becomes more certain.”
Stewart Robertson, Norwich Union economist, said: “After many years of being in the doldrums, the Japanese economy is now growing.
“There have been many false dawns since the bubble economy burst in the early 1990s. Initially last year’s revival was largely dependent on exports. But the most welcome development was a clear-cut recovery in domestic demand – consumer spending and corporate investment. The spectre of deflation has also faded – Japanese prices are now rising gently at last. Although these trends should continue this year and next, the economic upturn may be more subdued than many commentators expect. Japan’s demographics are hardly favourable to consumer spending for example.
“However, most of the excesses from the previous economic disaster in the early 1990s (absurd property valuations, massive bad debts in the banking system) have now been worked through putting the economy on a sound footing once more.”
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