Merrill Lynch's O'Neill: Japan market falls 'excessive'

Japan's manufacturing sector has beaten expectations following March's earthquake and tsunami, said Bill O'Neill, chief investment officer of Merrill Lynch, who sees further upside in Japanese equities.

Industrial production in April began to recover from a 15% fall in March. Manufacturers are now expecting an 8% increase in production in May and 7.7% in June, by which time production should have recovered to approximately 95% of the pre-quake level, data from the investment bank shows. Consumption is expected to rebound, with April's consumption numbers up 2.4% on the month following a near 5% fall in March. However, output fell 3.5% year-on-year in the first quarter and is likely to drop again in Q2, according to Merrill Lynch research. However, O'Neill is more bullish on the outlo...