Japan managers back domestic consumer stocks

Japanese equity managers are betting on the domestic consumption theme following the Bank of Japan's aggressive move earlier this month to avert deflation and stimulate the flagging economy.

They expect the recent QE package to boost consumer confidence and prompt a rally in domestic consumer-oriented sectors such as retail, construction and pharmaceuticals. Hideo Shiozumi, manager of the Legg Mason Japan Equity fund, expects the Bank’s aggressive monetary easing to succeed in ending deflation and achieving the 2% inflation target over two years. He said: “In addition to the purchasing of longer-term government bonds from financial institutions, the bank will increase its purchases of financial products with price fluctuation risks, such as ETFs and Japanese real estate i...