Schroders' Rose: There is scope for surprise in Japan

Potential for success with third arrow reforms

Schroders' head of Japanese equities Andrew Rose believes investors should not be disheartened by the perceived lack of progress in the third arrow of Abenomics, saying a positive surprise is not off the cards.

Prime Minister Shinzo Abe launched a three-pronged approach to invigorate the Japanese economy in 2013, with the third arrow consisting of a set of structural reforms to support business investment. However, progress in this area has been much slower than in the first two arrows, which focused on monetary and fiscal policies.  This has led some investors to sell their exposure to the region as they feel Abenomics has been ineffective, sending the Nikkei index 11.2% lower since the start of the year, and the index is down 7% over the past 12 months.  However, Rose, who runs the £2.2bn ...