Japanese stocks have more than doubled their returns since December 2012, on the back of Abenomics, but many investors are still not convinced of the sustainability of the rally.
This is apparent as Japan is the cheapest developed equity market at 12x forward P/E, compared to the US (15.5x) and Europe (13.2x). This discount is probably because Japanese corporate earnings growth is the lowest among the developed markets. Externally, uncertainties surrounding global trade is a big factor that is negatively affecting corporate capital expenditure. China is Japan's biggest trading partner, and escalating trade tensions between China and the US would have repercussions on Japan. Does Japan needs to implement excess cash levy? Also, the US and Japan are currentl...
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