Market Outlook: Japanese Equities

Fears over an increase in sales tax proved well founded, but a slow recovery since then has also confirmed that the outlook for Japanese equities remains positive

Invesco Perpetual 23 September, 2014 | 4:54PM
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Morningstar's "Perspectives" series features investment insights from third-party contributors. Here, Invesco Perpetual fund manager Tony Roberts examines the outlook for Japanese equities.

It is almost six months since the consumption tax rate in Japan was increased from 5% to 8%, and data points since that time have been largely in line with most commentators’ expectations.

Consumption trends were predictably strong ahead of the tax hike, as purchases of everything from durable goods to daily essentials accelerated. The resultant downturn after the increase has been undeniably sharp, with retail sales and household spending data so far seeing only a gradual improvement.

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Invesco Perpetual  is one of the largest investment managers in the UK, responsible for £70 billion worth of assets