Merryn's Blog

Japanese stocks have had a poor start to the year, but we’re as bullish as ever

Japan has had a poor start to the year. But the introduction of a new tax-free vehicle for Japanese savers means we’re as bullish as ever.

Japan didn't have a particularly nice start to the year (although regular readers will be pleased to note they made as much on their gold mining shares as they might have lost on their Japanese equities there is something in this insurance idea).

However, we remain as bullish as ever.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

We know there is more quantitative easing (QE) coming. We know that Japan is one of the few places where earnings momentum is on the up. We know that stocks remain good value. How can there not be value in a country where fully 50% of the stocks listed on the main index (TOPIX) are not covered by a single analyst? Quite.

But there is one more thing that is making us come over even more positive than usual NISAs (Nippon ISAs'). Jonthan Allum of SMBC Nikko has looked at who has been buying stocks over the last month (as dim witted foreigners have been dumping them).

Advertisement
Advertisement - Article continues below

The answer is Japanese individuals. Net individual buying in January hit an all-time record of 1.427trn. That, says Allum, could be just down to an admirable tendency to buy on weakness. But it could also be down to the fact that since the tax free saving vehicles were introduced 2.75 million people have opened accounts, and 470,000 of those have already begun to invest. How much? According to the Nikkei newspaper, not far off 300bn already. That's not a bad start at all.

Advertisement

Recommended

Visit/517688/the-british-equity-market-is-shrinking
Stock markets

The British equity market is shrinking

British startups are abandoning public stockmarkets and turning to deep-pocketed Silicon Valley venture capitalists for their investment needs.
8 Nov 2019
Visit/511212/reasons-for-investors-to-be-bearish-but-stick-with-the-stockmarket-bulls
Stock markets

There are lots of reasons to be bearish – but you should stick with the bulls

There are plenty of reasons to be gloomy about the stockmarkets. But the trend remains up, says Dominic Frisby. And you don’t want to bet against the …
17 Jul 2019
Visit/510684/good-news-on-jobs-scares-stockmarkets
Economy

Good news on jobs scares US stockmarkets

June brought the best monthly US jobs growth of the year, but stockmarkets were not best pleased.
11 Jul 2019
Visit/510135/trade-war-ceasefire-boosts-stockmarkets
Economy

Trade-war ceasefire boosts stockmarkets

Stockmarkets sighed with relief after the G20 summit in Japan brought a handshake between Donald Trump and Xi Jinping.
4 Jul 2019

Most Popular

Visit/investments/commodities/silver-other-precious-metals/600812/buy-silver
Silver and other precious metals

You should all own some silver. Just don’t expect it to make you rich

Silver is cool, beautiful and immensely useful. But for investors it's the most frustrating of metals. Dominic Frisby explains why you should own some…
12 Feb 2020
Visit/economy/600802/money-minute-wednesday-12-february-grim-times-for-european-industry
Economy

Money Minute Wednesday 12 February: grim times for European industry

Today's Money Minute previews industrial production in the eurozone, plus the latest from America's central bank.
12 Feb 2020
Visit/investments/investment-strategy/600804/the-secret-to-avoiding-being-panicked-out-of-your-portfolio
Investment strategy

The secret to avoiding being panicked out of your portfolio

With the coronavirus continuing to occupy headlines, investors still aren’t sure how to react. But the one thing you mustn’t do is panic. Tim Price ex…
11 Feb 2020
Visit/investments/commodities/600729/the-rare-earth-metal-that-wont-be-a-secret-for-long
Sponsored

The rare earth metal that won't be a secret for long

SPONSORED CONTENT – You can’t keep a good thing hidden forever; now is the time to consider Pensana Rare Earths and the rare earth metals NdPr.
31 Jan 2020