Will Japanese Equities Outperform Global Equities in US Dollars?
Published on October 29, 2024
No, we do not expect Japanese mid-/large-cap equities to outperform their global peers despite some supportive factors, such as Tokyo Stock Exchange (TSE) reforms and inflows from security investment schemes. Japanese equities tend to underperform in global activity slowdowns and contractions, and current valuations do not offer sufficient compensation to bear that risk, given our macro views. In addition, we expect the yen to continue strengthening—which should be an earnings headwind—while volatility may also be elevated around the upcoming general election. Instead, we recommend holding Japanese equities in line with benchmark weights.
Read the full publication here.