08
Dec
The Nikkei hit 23,000, time to take profits
The Japanese economy still has momentum. Exports are still the main driver of growth. Consumer spending remains tentative. The Nikkei may already be reflecting earnings growth.
Key points
- GDP rose a further +0.6% in Q4 (+2.5% yoy)
- Longest economic expansion phase in Japan since the mid-90s
- Exports continue to drive growth, rising +14.1% yoy
- GDP cannot expand in the absence of a recovery of domestic demand
- Revenue redistribution is too unequal
- Private consumption will hopefully pick up in 2018
- Several leading indicators are faltering
- The yen will likely continue to weaken
- Inflation is still not taking off
- No current opportunities in bonds
- Take profits on the Nikkei
