Don’t play chicken with the Bank of Japan

By Josh Ausden, Head of Client Investment Strategy, Neptune

Short-term yen strength has hurt the Neptune Japan Opportunities Fund but recent events have only added weight to our conviction that the Bank of Japan will act to ease policy, boosting multinationals’ profits and weakening the yen.

In recent weeks the performance of the Japanese stockmarket has been determined by rolling waves of fear that have emanated from the US, China and the oil fields of the Middle East. This has led to the widespread selling of equities and buying of the yen as investors rush to perceived safe assets in the face of growing recessionary fears. We believe these reactions are misplaced and lack a foundation in the real world economic data, as we explain in detail here.

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Important information: Investment risks

This fund may have a high historic volatility rating and past performance is not a guide for future performance. The value of an investment and any income from it can fall as well as rise as a result of market and currency fluctuations and your clients may not get back the original amount invested. Please remember that forecasts are not a reliable indicator of future performance. The content of this document is formed from Neptune’s views as at the date of issue. We do not undertake to advise you as to any change of our views. Neptune does not give investment advice and only provides information on Neptune products. Please refer to the Prospectus for further details. Neptune Investment Management Limited (“the Company”) is authorised and regulated by the Financial Conduct Authority. The Company is registered in England and Wales, number 4341768, and has its registered office at 3 Shortlands, London, W6 8DA.