Citigroup’s Kenji Abe is bullish on his namesake, the Japanese prime minister Shinzo Abe.
Abe’s Liberal Democratic Party and his allies won a majority in Japan’s upper house elections on the weekend. This will mean there is nothing in the way of Abe pushing change that will benefit the economy and the stock market.
“No elections are scheduled for the next three years, so we expect progress in structural reform in areas including agriculture and childcare,” says Citi’s Abe. “The election results are in line with expectations and we do not think they will change the upward trend for Japanese equities.”
Japan’s broad Topix and Nikkei 225 indices have both gained 22 per cent in US dollar terms and 42 per cent in yen terms this year, according to Bloomberg data. Bloomberg says the Nikkei is the tenth best performing major index in the world for 2013.
Even more impressive is Japan’s Jasdaq index. It has surged 69 per cent in yen terms and 45 per cent in US dollar terms, according to Bloomberg.