Update on Japan

Conclusion

We see several reasons potentially supporting Japanese equities including currently attractive valuations, improving earnings outlook, and continued BoJ accommodation. Political risks appear overblown, in our view, and strong fundamentals are likely to prevail. We believe Japan's competitive export position and improving domestic fundamentals may continue to support the earnings growth at home and abroad, while the risks of yen strength currently appear limited as the BoJ’s monetary policy diverges from a normalizing Federal Reserve and a looming step change in the ECB's monetary stimulus.

¹Source: Thomson Reuters, July 24, 2017. Index performance is for illustrative purposes only. Index performance does not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.
²Source: Thomson Reuters, July 21, 2017. Japan and U.S. represented by MSCI Japan Index and MSCI USA Index, respectively.
³Source: Thomson Reuters, June 30, 2017.
⁴Abenomics refers to the economic policies advocated by Prime Minister Shinzo Abe and is based upon the “three arrows” of monetary easing, fiscal stimulus, and structural reforms.

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Update on Japan

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