01-23-2017, 11:32 PM
We are positive on the Japanese economy, expecting 1.8% GDP growth. After adjusting for a slight decrease in the population, per capita GDP growth should continue to exceed that in the US, although once again, GDP measurement is fraught with difficulty. Yes, we expect a 16% increase in TOPIX due to strongly rebounding earnings cause by a normalized yen vs. a strong yen in 2016, but mostly due to stronger global growth and continued improvement in Japan’s corporate governance.
Vail: Abenomics has long been a success, especially for stock investors, but also for the common man, as Japan is growing in a healthy manner (no matter what the macro-economic statistics, which are very difficult to measure, say), greatly due to his determination to hire (and continually support) a central bank governor who promoted an expansive monetary supply. There have been many regulatory reforms or improvements and although most were non-grandiose, in aggregate they have contributed to Japan’s growth.