JP Morgan says Japanese stocks have room to go a lot higher

A report from analaysts at JP Morgan Private Bank outline a favourable view for equities in Japan:

• “In our view, share prices do not yet fully reflect the market’s full potential.
• Although Japanese stocks currently trade in the midrange of their valuations over the past 15 years, global positioning remains underweight Japanese equities”
• We think multiples could move higher as global investors come to appreciate the structural shifts underway.
• Sectors that stand out to us include financials, consumer discretionary (excluding autos), technology, industrials and real estate.”

JPM says Japan is welcoming long-absent inflation and nominal economic growth is moving higher. Also:

• corporate governance reforms are now strongly encouraging structural change focusing on efficiency and profitability
• this will result in companies returning more value to shareholders

This article was written by Eamonn Sheridan at www.forexlive.com.