Japan bulls are suffering from a nasty New Year hangover. After jumping by over 50% last year the Nikkei 225 has fallen by over 10% in 2014, the worst drop of all major markets. But there’s no need to panic.
The Nikkei’s fall is caused by global jitters: when risk-aversion rises, investors head for the yen, which is widely deemed a safe haven. A stronger yen is bad for the exporters who dominate the stock market.
But Japan’s fundamentals are “more encouraging than anywhere else in the developed world”, says John Authers in the FT. “Abenomics is working,” adds [...]
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