Many pundits have predicted a recovery for the Japanese stockmarket in recent years. But just when managers think it looks set to outperform it disappoints or, in manager speak, there is “another false dawn”. However, according to the latest S&P Fund Services report on the region fund managers are united in expecting Japan to outperform other developed markets.
There are two main reasons for this optimism according to Alison Cratchley, an S&P Fund Services analyst. First, the Japanese financial system has much less exposure to global credit than the other main western economies. Second, because the market has underperformed for so long its valuations are compelling.