|
Equities in the Land of the Rising Sun have seen
much interest from foreign investors with the strong
economic performance being announced lately.
We remain optimistic about the outlook for Japanese
equities because:
| • |
Skepticism about the durability of the current
economic recovery is beating a hasty retreat. |
| • |
At first, the argument was that the recovery
was merely export-led. Then it became clear that
corporate restructuring was increasing profitability,
cash flow and thus the ability of companies to
invest. |
| • |
In the backdrop of improved economic performance
and the associated decline in the unemployment
rate, consumer sentiment and spending is starting
to pick up (see chart). |
This reaffirms our belief that the Japanese market
is likely to continue outperforming its G7 peers over
the medium to long term.
|
Bulls and Bears 
