Swisslon: Japan's stock market "wins" regardless of the US election outcome
1min read Intelligence from Zhitong Finance reveals that Lombard Odier, one of Europe's largest private banks, is turning bullish on the Japanese stock market, believing it to be a best investment point regardless of the outcome of the US election. The company's Asia chief investment officer John Woods said on Wednesday: "I think Japan is in a win-win situation now." He said that a victory for former US president Trump would help keep the US dollar stable or stronger, which is good for the Japanese stock market. On the other hand, if Vice President Harris wins, tariffs may be eliminated, which would also boost the Japanese stock market. Woods added that Lombard Odier raised its rating on the Japanese stock market to "overweight" from "neutral" last week.
Despite the weakening rebound momentum of the Japanese stock market in recent months, the policy focus of new Japanese Prime Minister Nakaoka has been questioned, and the fluctuation of the yen may affect the profits of Japanese exporters, Lombard Odier still issued a bullish signal. The Topix index has fallen about 10% from its peak in July, and foreign investors have withdrawn after buying heavily earlier this year.
Woods said about political uncertainty: "We believe that Nakaoka, the LDP and its ruling partners are unlikely to upset the status quo in a meaningful way. I think the prospect of consumption-driven economic growth will continue to work."
At the same time, after the recent victory of the Labour Party, Lombard Odier downgraded its rating on the British stock market from "overweight" to "neutral". He said, "Every government has to wash dirty clothes", which may affect the market. The FTSE 100 index in Britain has risen about 7% this year, but has been in a range since the new government took office in July.
Since the end of September, China's stock market has soared under the stimulus of economic stimulus. Woods said: "I think it's a story about momentum, and I'll let these investors take the first 10% to 15% of returns. Once we see some meaningful policies behind the so-called recovery, we may be keen to invest."
