The Week In Hindsight 21 February 2014

The NIKKEI posted a partial recovery this week following the announcement of Japanese preliminary GDP figures, which missed expectations by some distance.The actual number showed the Japanese economy growing at just 0.3% during the final quarter of last year against expectations for expansion of 0.7%.

The negative print encouraged strong bids for local stocks as traders began to bet on more stimulus to come from the BOJ over the months ahead. The GDP numbers followed shortly after the BOJ announced its decision to hold the current pace of asset purchases pending further developments within the economy.

Despite the disappointment with GDP numbers, our view of Japan remains unchanged at the present time. We continue to expect investors in the nation’s stock markets to benefit from loose policy as a minimum, while a positive outlook for developed market growth altogether is supportive of continued positive performance from Japanese companies.