Our view on Japan for September 2017

In Japan equities were slightly down in sterling terms, the Nikkei 225 fell 2.07% whilst the broad Topix index fell 2.77%. The case for Japan still remains strong, exports rose 18% year-on-year forged out of global growth. It is clear that the landscape for Japanese equities is shifting, once reliant on a weaker yen we have seen over the last few months that this is no longer the case. Furthermore, the ratio of open jobs to applicants in Japan hit a 43-year high. There were 1.52 open jobs for every applicant, the highest since 1974, suggesting that Japan is still enjoying healthy growth.

September saw a surprise declaration by Japanese Prime Minister Shinzo Abe, as he called for a snap election. His stern stance with Kim Jong-un of North Korea and planned tax reforms to support childcare, education and the elderly enrich his chances of a victory and markets have been quick to price this in.  The election takes place on the 22nd October, and if he is successful, Japan’s monetary policy will continue which is good news for equities.

If you are unsure whether an investment is right for you, please contact us for advice on 0800 877 8866 or by email at enquiries@whirelandwm.com

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