The March “tankan” survey results are not expected to lead to the BOJ's further acceleration of QE.
In sum, there certainly are some worrisome issues, as always, but we find none of them convincing enough to prevent moderate increases in equity prices.
Much as we expected, China's economy has continued to slow faster than consensus, but does not appear to be in a hard landing.
Central Banks: Despite firm economic growth, we believe that a negative YoY CPI through September will steady the Fed's hand.
Coupled with our expectation for global bond yields to rise moderately, we maintain our overweight view on global equities vs. bonds.
The recovery in profits by Japanese export firms should continue to attract the attention of the markets in the first half of 2015.
John Vail updates his long-standing theme: Japan's Successful “Show Me the Money” Corporate Governance.
The disappointing economic data should not worry investors in Japanese risk assets very much at all.
The key theme of the past few years has been quantitative easing. Although the US has come to the end of its version of this experiment, QE programmes have begun or are about to begin in Japan and Europe.
We expect the next phase of the global evolution to be driven by a growing global population, rapid urbanisation and for most of it to happen in emerging markets with increasing focus on "green" development.