Japanese shares have lagged friends to date this yr, however Credit Suisse’s Suresh Tantia sees that development reversing quickly.
“In the developed market house, our favorite market is Japan,” Tantia, senior funding strategist at Credit Suisse’s Asia-Pacific CIO workplace, informed CNBC’s “Street Signs Asia” on Thursday.
“Japan has massively underperformed the U.S. fairness market this yr regardless of a really robust earnings momentum,” he mentioned.
As of its Friday shut, Japan’s Nikkei 225 has risen 7.89% for 2021. In comparability, the S&P 500 stateside has soared greater than 24% in the identical time interval.
‘Building blocks’ in place
The strategist mentioned a sequence of “constructing blocks” at the moment are in place for Japan to outperform globally within the coming quarters.
Firstly, Tantia pointed to Japanese Prime Minister Fumio Kishida’s resounding victory in the recent parliamentary election, describing the win as “very constructive for the market” resulting from expectations that the nation’s chief will introduce extra stimulus.
The second issue, in response to the strategist, is valuations.
“If you have a look at the valuation for the Japanese fairness market, it is buying and selling at a really enticing value in comparison with another developed markets,” he mentioned
Lastly, he pointed to the outlook for the Japanese yen, which has weakened greater than 10% in opposition to the greenback to date this yr.
“Weaker Japanese yen tends to be constructive for the fairness market and we do anticipate JPY to weaken in opposition to U.S. greenback,” Tantia mentioned.
