`Abenomics' Rallies Japan Stocks

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Aug. 26 (Bloomberg) –- In today's "Global Outlook," Bloomberg's Mia Saini takes a look at "Abenomics" and it's influence on the markets on Bloomberg Television's "On The Move Asia." (Source: Bloomberg)

Abenomics has been playing out.

A turnaround, certainly.

Prime minister shinzo abe they's policies to lower the end and and deflation, they are already paying off for corporate earnings.

It was profit outpacing the rest of the world.

The economy has benefited from the yen's 22% slide against the dollar, all this since the end of 2011. benefiting the most really from those have been the japanese exporters.

They jumped by the most in almost three years time.

Japanese companies profits are outpacing the world, as i say.

Earnings per share in six regions tracked by bloomberg , that is what you see on the screen right now, this purple line, and you can see right now, profits for the topix climbed the most, rising some 32% compared to that base of 100 in japan's equity benchmark, ever since a recovery from the earthquake.

Earnings in the u.s., it is important to see how that compares to those earnings.

That is the green line coming online.

Essentially earnings in the u.s. have climbed some 16% since june of 2011. all of this as the federal reserve spot purchasing program helps to stimulate growth.

Profits and the uk, also the other emerging markets and australia, they declined in the same time.

You can see the variety of lines coming online, showing you that corporate growth is not as good as japan or in the u.s. you can make the argument that japanese companies' earnings were low to begin with because of the earthquake, but keep in mind many of those companies earnings were as a result of the earthquake.

A london-based strategist at citigroup says first, earthquake, earnings have half, but going forward, he says they doubled again with the latest boost him in from weakness in the end and improving -- in the yen and improving economic performance.

Where do we go from here?

Let's look at what the estimates are saying in terms of earnings in the topix.

The expectation for the topix is it will grow from 11% in 2014. that is really in line with the average of the other regions and what we have been seen so far.

You can see the chart, the topix, up almost some 33% year to date.

As for the yen, the yen will strengthen to 91 per dollar.

That could happen as early as next month.

I would say it is a level we have not seen since late february.

In terms of the median forecast.

The most important thing is that it may weaken even further to 101 by the end of september and about 104 by year-end.

That is our global outlook for today.

This text has been automatically generated. It may not be 100% accurate.


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