Japanese equities: Where do they stand and what is to come in 2023?

Stocks slipped in December

The Japanese equity market ended December lower with the TOPIX down 4.6% on-month and the Nikkei 225 falling 6.5% - with dividends.

Lower-than-expected growth in the US consumer price index somewhat alleviated concerns of a prolongation to US rate hikes, which acted as a tailwind for stocks. However, the market was dragged down overall by a combination of factors including fears that the global economic climate could deteriorate as a result of monetary tightening by the Fed and the European Central Bank. There was also increasing uncertainty regarding the economic outlook for Japan on the back of a rise in Japanese long-term interest rates, following the Bank of Japan's decision at its Monetary Policy Meeting to a...