The Japanese share market will continue to rise for the next four to five years, predicts Invesco Japan chief investment officer Atsushi Kawakami.
“In 2002 we reached the bottom for domestic machine tool orders and non-residential construction, so based on previous cycles there could be another seven years growth in these markets,” he said.
“The current forecasts show machine tool orders and construction possibly reaching the growth achieved in the 1990 peak.”
The optimism is also supported by the recurring profits of Japan’s top listed companies during the past five years. A move that is unprecedented in Japanese corporate history, Kawakami said.
The Nikki is also coming off its all-time low in April 2003 and has shown a steady rise since then.
With the fundamental changes in Japanese business and culture, Invesco is focusing on companies that will benefit from the recovery in domestic spending and those with global growth opportunities and competitive advantage.
It will also invest in Japanese companies that are benefiting from increased trade with Asia.
The Invesco Japanese equity fund has been available in Australia for many years as part of the company’s Asian equities offering.
The Japanese component is now being offered as a standalone product, with a minimum investment of $20,000. It has just been given a Standard & Poor’s four-star rating and the next move is to place the fund on major platforms in Australia.
