• Tel: (646) 452-6700
  • US Toll-Free: (800) 829-4337
  • Fax: (212) 599-1916

We take great pride in our firm's intellectual capital.

Sharing current views and opinions showcases the thought leadership we bring to our clients.

Current Views

April 11, 2013: Aggressive Policies Boost Japanese Stocks

Thoughts from Our Domestic Equity Team

Haruhiko Kuroda, the newly appointed Governor of the Bank of Japan (BOJ), made a strong initial impression on capital markets during his first policy meeting last week. Expectations were very high that the central bank would take bold steps under his leadership towards battling deflation, and he did not disappoint. He made explicit his goal of attaining a 2% inflation rate in approximately two years. In order to accomplish this, the Bank of Japan will dramatically expand both its purchases of government bonds as well the country’s monetary base. It will also ramp up its purchases of REITs and ETFs. Also noteworthy is that there was only one dissenter among the nine members of the Policy Board, indicating strong support for these far-reaching measures. Despite very high expectations leading up to this meeting, investors were clearly impressed as they drove the Japanese stock market up over 2% on the day.

Anticipation of extraordinary stimulative measures has already impacted the Japanese economy. The Yen has weakened materially against the dollar and other major currencies. This has been a boon for the country given that Japan is an export driven economy, and a weaker currency enhances the relative competitiveness of its products which are sold into international markets. Additionally, policy initiatives appear to be having a positive impact on the Japanese consumer. Purchases of discretionary goods have been picking up, and a recent measure of consumer sentiment reached its highest level since June of 2007.

We have held a constructive view on Japanese equities over the last few months. This was largely predicated on the incoming Abe administration and our belief that it would usher in a new era of more aggressive fiscal and monetary policies. The appointment of Kuroda to the highest post at the BOJ and the aggressive start to his tenure only serve to reinforce this viewpoint. Despite the significant run up in Japan’s Nikkei Index so far this year, we continue to believe that the market remains attractively valued, particularly in light of these most recent announcements.

Submitted by: Jason Sheer, CFA – Portfolio Manager

This information is intended solely to report on investment strategies and opportunities identified by Roosevelt. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. References to specific securities and their issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities. Please contact us at 646-452-6700 if there is any change in your financial situation, needs, goals or objectives, or if you wish to initiate any restrictions on the management of the account or modify existing restrictions, or if you would like to request a copy of our Code of Ethics. Our current disclosure statement is set forth on our Form ADV Part II, available for your review upon request, and on our website, www.rooseveltinvestments.com.

« Click here to go to the previous page

The Roosevelt Investment Group, Inc. is an independent investment management firm that is not affiliated with any parent organization. The Roosevelt Investment Group, Inc. manages domestic equity, international equity, domestic fixed income, global fixed income, and balanced assets for primarily U.S. clients. The Roosevelt Investment Group, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission and notice filed in all 50 states.

Please remember that in order to invest you must first read and understand the Form ADV Part 2A and our Privacy Policy.

Copyright© 2018. All rights reserved.