“No need for the Bank of Japan to raise interest rates much more than it has done”

Julius Baer analyst on the BOJ, JPY and Japnese equities.

• no need for the Bank of Japan to raise interest rates much more than it has done
• once markets settle 500-odd basis point interest rate differential between JPY and USD will once again be primary
• do not see the yen appreciating from here

The supports for Japan’s equity market remain unchanged, including:wage growth of 5+% this year (compared with gains of 7% in the previous 20 years) corporate reform

• increased dividend pay-outs and share buy-backs
• brand equity that surpasses other Asian countries
• a large and liquid market of around 4,000 listed companies
• hundreds have returns-on-equity in the high teens and over
• earnings’ growth for the Nikkei 225 Index is forecast by the consensus to be 7 per cent this year, and 8 per cent next year.

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I posted earlier on this:

• Japanese stocks to rebound after recent sell-off – SuMi TRUST

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ps. Not everyone agrees with these views.

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Nikkei update:

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