Will corporate earnings improve enough in 2015 to save ailing Japan?

clock • 2 min read

There are two other factors, aside from wage growth, that could support growth in Japan, says Michael Stanes, investment director at Heartwood Investment Management

Japan is presenting a paradox: the stock market continues to rise at the same time as growth disappoints. Real GDP in the fourth quarter of 2014 fell short of consensus expectations at 1.5% quarter-on-quarter (annualised), after a contraction in growth in the second and third quarters. This apparent disconnect signals investors believe Japan is turning the corner, but are they setting themselves up for another dose of disappointment? The clinching factor as to whether Abenomics and the Bank of Japan's reflation policies succeed will be rising income levels. Japanese consumers need to ...

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