Investors approve Abe’s latest move in Japan

Japan is attractively priced for investors, and interest is growing following the latest set of reforms from Prime Minister Abe, according to fund manager iShares.

Stephen Cohen, chief investment strategist at iShares EMEA, said that an increased equity allocation by the $1.2 trillion government pension fund, cuts to corporate tax, and better economic data from Japan could boost Japanese equities. Japan led a global equity market rally in 2013, but has underperformed in the first half of 2014, leading Cohen to state: “The fact that Japanese equities underperformed between January and May provides an attractive entry level for investors. Japanese equities now trade at a greater discount to broad developed markets, at 60% on a price-to-book basis, and we have already seen a 5% increase in Japanese equities in the past month.”