But though Japanese stocks will likely be able to move higher this year, I’m not advocating an overweight view.
The country still faces structural long-term growth challenges. These include unfavorable demographics, declining productivity and mounting public debt.
In addition, as I’ve mentioned before, investing in Japan involves a currency effect for dollar-based investors. For pure exposure to potential BOJ easing-related stock gains, dollar-based investors would want to hedge out their exposure to the yen.
Russ Koesterich, CFA, is the iShares Global Chief Investment Strategist.