Japan – Economic data tells a different story | Harris Fraser
Research Insights
13 June, 2020
Japan – Economic data tells a different story

Despite continued concerns over the epidemic situation in the country, Japan equities continued the strong performance in May, the Nikkei 225 Index and the TOPIX Index gained 8.34% (7.46% in US$ terms) and 6.81% (5.93% in US$ terms) over the month.

With the number of new cases falling to new lows during the month, the epidemic in Japan seems to be over, the Japanese government decided to call an end to the State of Emergency in late May. In anticipation of the lockdown lift, equities continued the strong performance expecting swift recovery from the epidemic.

However, economic data tells a different story, with various leading indicators still lingering in negative territories. As the global epidemic situation has yet to be curbed, tourism and consumer discretionary sectors suffered from travel bans, lockdown orders, and weakening consumer confidence across the world. While the local markets should receive continued support from the Bank of Japan with the ongoing quantitative easing, with the continued economic recession in 2020 Q1, we remain relatively sceptical of the prospects of rapid economic recovery on the island country, hence the neutral outlook on the Japan market.

<Harris Fraser Research Team>

Build Lasting Wealth Today.

Start your investment journey with Harris Fraser

get started