Looking ahead, Masatoshi Kikuchi, chief Asia strategist at Mizuho Securities, argues that improved corporate governance could provide better value for Japanese shareholders.
“Activist funds are becoming more active in Japan,” Kikuchi said in the article. “There is growing expectation of more share buybacks and dividend increases.”
However, Neil Azous of Rareview Macro warns of a short-term slowdown, pointing out that the Mothers Index, or Market Of The High-growth and Emerging Stocks, has experienced its largest drawdown in two months. Since local investors are the ones who typically speculate on the Mothers, or small-cap stocks, and March historically shown a seasonal trend where domestic investors repatriate their money home, Azous argues that retail speculators could take profits on their large dollar-yen gains.
WisdomTree Japan Hedged Equity Fund
For more information on Japan, visit our Japan category.
Max Chen contributed to this article.