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Morgan Stanley Prefers Japanese Stocks Over Europe

Morgan Stanley predicted that the Topix might jump by 15% by June of 2020. He calls Japan’s market to be oversold and unloved which is the opposite of the US equities. According to the reports, the investment bank passed a remark, stating that Japan hasn’t been cheap. It’s quite rare for Japan to be cheap.

Japan is considered to be the opposite image of the US, in various aspects. Its average relative evaluations tend to be low all the time. The slumping of the Japan’s Topix is found to be 14% in comparison to one year before. At the same time Nikkei 225, is experiencing a downfall marked by a 6.5% decreases. Compared to this, the S&P 500 is having a hike, which is 5.65% more than last year. Also, the Nasdaq Composite is having a rise of about 12% at the same time. Both of them have managed to reach the record high.

Since the European equities are undervalued too, Morgan Stanley picks Japan over Europe. The investors, who are looking for the cheaper parts of the global market, there is a high chance for Japan get picked over Europe. This is actually promoted by the fact that US is planning to impose auto tariffs.

Japan has its own advantage for having a compelling undervaluation and having the potential of offering better earnings and the profitability story. Due to the US-China trade dispute, there is a growing concern for Japan’s economy as its factory output and export are affected by China’s economic drop. It is considered crucial for Japan to increase its sales tax, in order to cope up with its debt which is double the size of its economy. The country has a rapidly aging population for which it is supposed to arrange for financial security. Yet, Japan ditched the idea of increasing the sales tax twice, when its economy is dropping low.

Raul Varner
Raul Varner Author
WRITER & AUTHOR At All Industry News

Raul, with a background from Health Sciences and experience of 4 years, is an elite and versatile Senior Content Writer at All Industry News. Here, he writes articles and blogs associated with the domain of Health. Raul writes about the latest breakthroughs, inventions, innovations, initiatives, programs, events, and much more relating to the Health domain. In free time, he likes to spend time with friends and family as well as explore new places.