JAPANESE LAGGARDS TO PLAY CATCH UP, SAYS CITI
Japanese equities have performed well since the trough in mid-April, helped in part by last month’s trade deal with the U.S., and Citi believes some of the laggards will start to gain on the outperformers.
High-quality stocks with higher valuations have generally outperformed since the April low, while cyclical stocks have lagged.
“Investors have shown a strong preference for reassuring stocks amid an uncertain outlook for tariff talks and the economy,” Citi’s Ryota Sakagami says.
“Amid expectations for uncertainty to decline due to the Japan-US tariff agreement and for Japanese stocks to continue rising, we think lagging sectors and stocks are more likely to catch up.”
If they are right, Citi believes the Japanese auto sector to be a major player.
“We believe the potential for a rebound in sector share prices is substantial now that uncertainty over US tariff policy has subsided and concerns over economic deterioration in the US and elsewhere is weaker than it was,” Sakagami adds.
(Samuel Indyk)
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EARLIER ON LIVE MARKETS:
MARKETS CALM, BUT YEN ROUT MEMORIES STIR HEDGING CLICK HERE
MORE GAINERS THAN FALLERS IN VOLATILE TRADE, PHARMA DOWN CLICK HERE
EUROPE BEFORE THE BELL: BOUNCE CONTINUES AS EARNINGS PLEASE CLICK HERE
TARIFF TOLL YET TO DETER STOCK BULLS CLICK HERE
AloJapan.com