JAPAN - Recovery in the Japanese stock market is dependent on its government taking steps to curb deflation, according to Britannic Asset Management.
And measures being taken by the Bank of Japan to tackle deflation have given the fund manager cause for optimism.
Britannic’s head of Japanese equities Natasha Chetwynd said: “The big problem at the moment is deflation and if the Bank of Japan makes a coordinated end to it, then it is a great opportunity to buy in Japan.
“The problem is that people wonder whether the government will ever get its act together in terms of putting together other aspects of an anti-deflation package, including things like tax cuts.”
Britannic’s views on Japan contrast with gloomier forecast from most other fund managers. A report from State Street Global Advisors last month stated that the Japanese economy was not capable of making an autonomous recovery as it was too dependent on foreign trade.
But State Street added the market should be stable on the back of a pause for the US economy.
It said: “Some prospects for improvement in tax policy and strong growth in the region should also be supportive of the economy and ultimately the capital markets.”
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