Closing note
The BOJ, as discussed in the case of real estate, is also trying to reflate equities more generally with its purchases of exchange-traded funds. I’ll repeat his view: It would be rude not to participate when the BOJ is so clearly telling us its intentions to inflate both equity and real estate prices. Who are we to fight the BOJ?
The path of least resistance, in my opinion, is for Japan equities to trade higher. Earnings expectations are on the rise, and I agree with Nicholas’ analysis, which suggests that current analyst estimates for earnings are too low and will eventually rise, providing support for the market.
I want to thank CLSA for putting on a fabulous Japan investment conference. If you trade Japanese equities, I suggest you try to attend their conference next year. And a big thank-you also to Nicholas Smith for agreeing to let his comments be published.
1The CLSA Japan Forum 2014 was a conference hosted by CLSA for institutional investors interested in Japan.
2Refers to the TOPIX.
3Source: CLSA, Nicholas Smith comments.
4Source: Cabinet office, http://www.esri.cao.go.jp/en/stat/ank/h24ank/h24ank_summary.pdf.
Important Risks Related to this Article
Foreign investing involves special risks, such as risk of loss from currency fluctuation or political or economic uncertainty. Investments focused in Japan are increasing the impact of events and developments associated with the region, which can adversely affect performance.