Elizaveta Gridneva of IBKR Hong Kong welcomes Nick Ng back to the IBKR podcast to discuss all things Japanese markets. From rising bond yields and yen intervention to Japan’s equity rally, corporate governance reforms, and the forces shaping its long-term outlook, Nick breaks down what investors should be watching.

How Much Higher Can Japanese Stocks Go?

IBKR Podcasts

Hello everyone, welcome to IBKR Podcasts. My name is Elisaveta Gridneva. Today I'm joined by Nicholas N, who is head of Asia-Pacific Wealth Business at Daiwa Asset Management and listeners who are already with us, you know Nick. So hi Nick, welcome back. Hi Elisa, thank you for having me back on the podcast. Thank you. We are very curious to hear your updates on Japan, so let's dive straight into it.

So, Japan's cabinet approved Prime Minister Takeichi Senai, first major growth strategy in June. How is this expected to impact the overall Japanese economy? So, the Takeichi administration announced their first major fiscal stimulus package of around 370 trillion Japanese yen, which is equivalent to about 2.3 billion US dollars.

And this is expected to be focused or spent on 17 strategic sectors, primarily being the AI sector, semiconductors and chips, as well as clean energy and healthcare. So, there's around 25% of this spending going to be focused on the AI sector.

And from our perspective, if there was no fiscal growth package, it's likely that GDP for Japan up until the year 2040 could be around 0.5%, which is fairly flat.

However, if the effects of all the investments, as well as capital allocation, are fully realized and actually materialized, GDP for Japan up until the year 2040 could potentially hit 1.8%. That's great. That's great. And also, we see 10-year Japanese government bond. Yields hit 3% this week.

What are the recent drivers for higher yields? So, JGB yields have been trending higher over the last couple of years and have really started to accelerate in the last few weeks. And this is for a few reasons.

How Much Higher Can Japanese Stocks Go?

Read the full transcript

The candid version is on a podcast,
not the earnings call.

How Much Higher Can Japanese Stocks Go?

Read the full transcript

The candid version is on a podcast, not the earnings call.

The candid version is on a podcast,
not the earnings call.