ANALYSIS: Time to bail out of Japanese equities?

Added 18th February 2016

What was viewed as a sign of desperation by many when the Bank of Japan cut rates well into negative territory at the end of January has been followed by a poor economic growth number.

ANALYSIS: Time to bail out of Japanese equities?

With Japan reporting its economy shrunk 1.4% in the fourth quarter of 2015 on an annualised basis investors may well be asking; if that is all the country can manage even with a vast quantitative easing programme and rock bottom interest rates what prospects are there for the aging nation?

There is justifiable optimism about the positive impact that corporate reforms and increased workforce participation by women could have, but this may well take many years to feed through into share prices.

In the meantime perhaps investors should bank any money they have made in the period immediately after the QE programme launched and have another look in five years’ time.

Looking at the chart below, many investors who added broad exposure to the market in 2013 or 2014 could still pocket a nice profit if they bail out now.

The direction of travel this year so far looks ominous though, meaning those who sit tight could be back where they started or even in loss making territory if things do not change quickly.

Visitor's Comments Add your comment

Add Your Comment

We won't publish your address


FSA Investment Forums: Singapore & Hong Kong 2016

Singapore, Tuesday 25th October

Hong Kong, Thursday 27th October

FSA Investment Forum: Manila 2016

Wednesday 23rd November