Mid-Year Outlook: Japan Equity Strategy: Japan Is Back, Still Climbing: The Summit Lies Ahead

研报英文原文证据摘录

Mid-Year Outlook: Japan Equity Strategy: Japan Is Back, Still Climbing: The Summit Lies Ahead

Japan InsightM

TOPIX EPS Outlook and Valuation Target: June 2027 Outlook

Our bullish stance on Japanese equities remains: Against a backdrop of sustained and

stable inflation in Japan becoming entrenched, companies have begun to rethink pricing,

wage, and investment decisions, while households have started to reallocate assets. In

addition to the permanent introduction of the new NISA program and indefinite extension

of the tax-exempt holding period, the Tokyo Stock Exchange’s request for “management

that is conscious of the cost of capital and share price” and growth-investment-oriented

governance reforms by the FSA and TSE are further encouraging capital reallocation. The

Takaichi administration, which secured a strong political base in the February Lower House

election, has also made clear a policy stance centered on both growth investment and

crisis-management investment. The structural factors underpinning the long-term bull

market in Japanese equities that we have long argued for, if anything, have strengthened

further.

The current situation in the Middle East is a cyclical source of disruption. At the same

time, however, it suggests sticky inflation and the continuation of growth driven by capex

rather than personal consumption. The Takaichi administration has shown a strong

commitment to promoting public- and private-sector investment in strategic areas such as

economic security, AI, and semiconductors. We believe the benefits are more likely to

spread to B2B sectors that underpin capex, industrial infrastructure, and technology

implementation than to B2C sectors.

Our base case remains constructive: We expect “Japan is back” momentum to continue