Nikko Asset bullish on Japan equities
Fundamentals such as corporate earnings underpin potential re-rating, it says
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JAPAN equities have room to rise significantly in the near to medium term, even as the recent strength of the yen has pressured stocks on the Tokyo exchange.
Nikko Asset Management chief investment officer (Japan) Hiroki Tsujimura says Japan equities are oversold. Fundamentals such as corporate earnings underpin a potential re-rating, he says. And the increasing adoption by companies of the corporate governance code, which took effect last year, will raise total shareholder returns over time.
The firm expects earnings growth of 10 per cent this fiscal year (ending March 2016). This is expected to moderate to 8 to 9 per cent in the next fiscal year to March 2017.
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