In early September, Japanese stocks fell due to a strong yen and concerns about a U.S. economic slowdown. However, the market began to recover as the FOMC indicated the timing of further rate hikes is distant.
Japanese equity market is recovering from the turbulence in August due to unwinding of yen carry trades. Shigeru Ishiba’s victory in LDP (Liberal Democratic Party)’s presidential election initially raised concerns, but he will uphold economic policy targets set by his predecessor. Escaping a deflationary economy and corporate reform remain key drivers for Japanese equities.
Ongoing volatility in USD/JPY rate is a concern, but a positive earnings outlook for FY2024 is expected, as companies are striving to improve profitability through price increases after experiencing a pandemic, war, and labour Single-digit earnings growth projected for FY2024 and FY2025.
Full article: pdf AMOI Market Review and Outlook September 2024
Written by Kazuhiko Hosaka, Senior Product Specialist, Asset Management One Co., Ltd.