Japan Stocks Best for Income Investors, says Neptune

THE INCOME INVESTOR: Japanese companies are prioritising shareholders, maturing from cash hoarders to cash machines by upping share buybacks and dividend pay-outs

Emma Wall 1 September, 2015 | 4:41PM

Has Abenomics run out of steam? If the headlines are to be believed the third arrow of Prime Minister Shinzo Abe’s economic reform plan has failed to hit its target. The Japanese economy contracted 1.6% in the second quarter of this year and the stock market around 2,000 points over the past month.

But defenders of Abe point out that one bad quarter does not a recession make – after all, the US economy shrunk in the first three months of both this year and 2014. And Japan’s contraction is mostly due to factors outside of Abe’s control; that is a drop in exports to troubled China. Today’s 4% fall in the Japanese stock market is also the fault of China.

“Japan’s reforms are not failing to hit target, Abenomics is working,” said George Boyd-Bowman, manager of the Neptune Global Income fund. “We have pretty concrete evidence that first two arrows are hitting target – corporate earnings among the largest Japanese companies are 130% higher, the yen is weaker, land prices are rising for first time in decades and unemployment is at a 17 year low.”

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
JPMorgan Japanese Ord453.00 GBX0.00

About Author

Emma Wall  is former Senior International Editor for Morningstar

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