Foreign investors may at last be returning to Japan’s stock market after a six-year sell-off, amid the growing realization of an opportunity that no other place can provide, a top fund manager says.
Comgest Asset Management Japan Ltd. expects Japan’s profit growth to outpace that of the U.S., as corporate taxes will "almost certainly” rise under U.S. President-elect Joe Biden. The Tokyo Games and a recently forged Asia trade pact will all serve as additional reasons for investors to seek Japan-specific exposure.
The euphoria building since last month over hopes for an end to the pandemic has driven U.S. and global stock indexes to all-time highs. While the 225-issue Nikkei average is up 13% this year — near the highest level since 1991 — it’s still 31% below its 1989 bubble-era record.