Will the Nikkei continue to rally? Where will the yen head next?
The Japanese equity market has had a strong start to 2024 and continues to flirt near record highs, but how long can this continue?
We ask Schroder Japan Trust’s Masaki Taketsume this question, along with why he thinks real positive structural shifts are in motion. IG’s Angeline Ong also gets Taketsume’s outlook for the Japanese yen amid swirling Bank of Japan (BoJ) intervention talk.
(AI Video Summary)
Discussing Japanese equities
In this exclusive IG interview, Masaki Taketsume, manager of the Schroder Japan Trust, discusses the durability of the bullish trend in Japanese equities, attributed to inflation and improvements in corporate governance. These factors have bolstered corporate profitability and valuations, enhancing returns on equity. Further, record-high dividends and share buybacks are supported by ample corporate cash reserves, indicating potential for continued growth.
Japanese monetary policy
Additionally, normalization of Japan's monetary policy may minimally impact the equity market, while also potentially strengthening the Japanese yen. Taketsume suggests focusing on domestically-oriented sectors and smaller cap stocks to leverage ongoing economic improvements.
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