The economy grew by 4.1% annualised in Q1, while the equity market offers exceptional value….
Nathan Gibbs, Fund Manager, Japanese Equities
For professional investors and advisers only.This document is not suitable for retail
Despite what’s happening elsewhere in the world, Japan is heading for significant recovery. The economy looks strong: first quarter GDP figures, released last Thursday, showed the economy has grown by an annualised 4.1%, driven by personal consumption and public spending. Fourth quarter numbers, originally shown as a decline, have also been revised upwards.
Another reason why we’re bullish is the rebound in exports from Japan to the rest of Asia, which are expected to move to all-time highs as the impact from last year’s earthquake fades. Exports to the US have also improved recently.
While investors were sceptical about forecasts for the recovery in public construction figures post earthquake, the actual numbers now coming through are very encouraging.
Meanwhile, the market in Japan is deeply undervalued (trading at less than book value). If this positive economic picture continues to develop we believe the stockmarket will be re-rated.
Disclamer
The views and opinions contained herein are those of the Azad Zangana, European Economist and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds.
For professional investors and advisers only.This document is not suitable for retail clients.
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Source: BONDWorld – Schroders
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