Japan’s Tokyo Price Index, also known as Topix, is up over 6% YTD.
- Topix is a broad index, with around 2,000 constituents.
Soc Gen on the performance:
- Foreign investors are back – which says something about the nature of the equity market recovery in Japan
- That is a less (of) a duration trade than a broad-based upturn based on fundamentals, robust domestic demand, and more generous distribution policy (share buybacks accelerate)
- foreign investors bought a net 2.1 trillion yen ($15.4 billion) worth of Japanese stocks in April
- Japan’s corporate sector remains the largest net buyer of Japanese stocks, with a volume of 1.1 trillion YTD
On the Bank of Japan, SG expects the Bank to widen its yield curve control band to 100 basis points above and below its target for 10-year Japanese Government Bonds (BOJ's JGB target is 0%)
- would “be bullish for the yen, but not automatically bearish for share prices as the yen remains in deep undervalued territory,”
