“Yet other factors support a more upbeat outlook for Japan. Not least is its own fiscal stance. In its forecasts, Morgan Stanley noted that a fiscal stimulus package passed by parliament in October, including money for infrastructure and earthquake relief, will be spent over the next two years,” reports Bloomberg.
A depreciating yen is supporting Japanese markets as a weaker currency bolsters the country’s large export industry. Japan currency-hedged exchange traded funds are rebounding as rising speculation of a Federal Reserve interest rate hike later this month fueled a strengthening U.S. dollar and depressed the yen currency.
“Stronger U.S. demand for imports was one reason the Organization for Economic Cooperation and Development recently lifted its global growth forecasts for 2017. The OECD expects a rebound in international trade to drive Japan’s export growth higher over the next two years, with the economy growing 1 percent next year before slowing to a 0.8 percent expansion in 2018,” according to Bloomberg.
For more information on the Japanese market, visit our Japan category.