Is Japanese Stock Market Still Interesting?

If you think about the stock market of developed countries Investors tend to focus on US and European stock markets such as Germany, France, the UK and may forget that in developed countries. The Japanese stock market is considered a developed country.

Looking at the reasons why the Japanese stock market is often overlooked, the key factor is that in the past five years before the Covid-19 pandemic, Japan's economy has grown on average only 1%, which is a low percentage of its population structure. many elderly Including the measures to stimulate the economy that the Japanese government did not meet expectations. This makes investors less interested in investing in the Japanese stock market.

However, since the beginning of March 2022, the NIKKIE 225 Index has continued to rise above 25,000, prompting investors to turn around and pay more attention to the Japanese stock market

In 2022, the International Monetary Fund (IMF) forecasts Japan's economic growth (GDP) at 3.3%, in line with the Japan Cabinet Office's forecast for GDP this year to grow 3.2% as the government announced. Approved the fiscal year 2022 expenditure budget, which had a record amount of 107.59 trillion yen in the past.

The expansion is the largest since fiscal 2010, with private and public consumption accounting for more than half of the economy. It is expected to grow by 4.0% as the situation of the Covid-19 virus epidemic will unfold in a better way. At the same time, the private sector and the public will return to spend more. And the private sector investment in real estate construction, roads and pedestrian walkways is expected to grow by 5.10% and if the epidemic situation clearly improves. The government will reintroduce tourism stimulus measures. In addition, the monetary policy that the Bank of Japan will maintain the short-term interest rate at -0.1% will support economic activities. This will benefit the company's performance in Japan, which will see strong profits once again.

Based on the recovery and clear measures mentioned above, Sumitomo Mitsui DS Asset Management estimates the NIKKIE 225 index this year is likely to rise to trade at 32,000 as the country opened. and the recovery of tourism will stimulate domestic consumption to be bright again.

For the year 2022, interesting industries are tourism and technology. As Japan currently has relaxed measures to allow foreigners to travel to work. as well as the technology business group The Japanese government has restructured the use of digital technology to implement national policies. to promote management reforms that use more information technology Therefore, the budget and support for technology has been increased this year.

As for the risks that Japanese stock markets may face in 2022, namely, the Covid-19 virus epidemic is not over. Although Japan has a high vaccination rate of about 80%, the virus mutation will affect the opening of the country. In the future, the next thing is that being an aging society will result in a slowdown in spending and consumption. and the government's budget may be cut to take care of an aging society that produces less economic productivity. while the labor market may be in short supply

But with the positive economic factors and various measures, the Japanese stock market from which it used to be outside the eyes of investors. Come back to become another interesting market, not losing the developed countries stock market in America and Europe. If investors are interested and are starting to invest in the Japanese stock market can start from investing through mutual funds that have a policy to invest in the Japanese stock market