Japan 'on the brink of recession': Contrarian play or value trap?

Japanese equities under the microscope

Investors should maintain a positive long-term outlook on Japanese equities, according to some professional fund buyers, who believe attractive valuations and negative investor sentiment means there is plenty of upside potential.

Some economists, however, warned Japan's risk balance is "skewed to the downside", with the coronavirus outbreak likely to further bruise its already-fragile economy. Figures released by Reuters last Monday showed Japan's GDP shrank by 6.3% during Q4 2019 - its fastest contraction since Q2 2014 when a tax hike bruised the consumer sector. John Redwood on a 'pioneering' Japan According to the data, capital expenditure in Japan fell by 3.7% during the last financial quarter - more than double the projected fall of 1.6%. Reasons cited for the contraction include another sales tax h...