Typhoons, Trade War, Taxes… Yet Japan’s Still a Haven
Competitive valuations and improving governance are positive factors for the nation’s stocks amid a global slowdown.
Take shelter where you can find it.
Photographer: CHARLY TRIBALLEAU/AFP/Getty Images
Japan’s equity market faces a host of negative factors that have depressed its gains relative to U.S. and European stocks this year. That underperformance could be poised to reverse: Attractive valuations and increased shareholder activism are burnishing the country’s appeal as a haven from rising international anxieties.
The S&P 500 and Euro Stoxx 50 indices surged more than 14% in 2019 as of Thursday in Asia, while Japan’s Topix rose only 5%. There’s no avoiding the fact that the Japanese economy is slowing. Growth in the second quarter was revised down to an annualized pace of 1.3% from a preliminary reading of 1.8%, reflecting weakening business investment and declining exports amid the U.S.-China trade war.