While the first two ‘arrows’ of Abenomics have helped boost Japanese equity performance and devalued the yen, the jury is still out on whether the strategy is succeeding. Much will depend on the third arrow of structural reform.
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.
The Swedish central bank’s surprise announcement that it has pushed interest rates further into negative territory is the latest piece in what is an increasingly worrying puzzle.
The much-touted wall of worry that investors have been climbing in recent months seems once more to be winning.
The FTSE 100 edged back over 6000 on a wave of positive sentiment triggered by the surprise announcement that Japan has moved to negative interest rates.
Japanese equities are enjoying a place in the rising sun in terms of the preferences of many investors, but is this a sound decision destined to yield rewards or an act of desperation?
Smaller companies and Japanese funds dominated the top of the 2015 fund performance tables.
Even though doubts over Abenomics are increasing, equities may be in good shape next year.
Schroders is to merge its Schroder Japan Alpha Plus fund into Andrew Rose’s Schroder Tokyo Fund, the firm has confirmed.
Industry commentators remain positive about equities in 2016 following the US rate hike, opting for Europe and Japan over the US.
Market volatility is driving investor interest to the Eurozone and Japan, according to Aman Dhingra, executive director at Coutts in Singapore.
Japan-based fund house Nikko Asset Management has launched a Luxembourg-domiciled Asia equity strategy for European investors as it continues to grow its range of UCITS funds.
