Kavan Choksi Japan- What Are The Top 3 Reasons To Turn to Japanese Investments?

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The economy of Japan has been ridden with time periods of stagflation and deflation for several years, not to forget the lost decade that in the past turned several investors away from the market. The election of Shinzo Abe as the Prime Minister of Japan has sparked hopes that the nation can reverse the economy; however, the progress in this direction has been really slow to date. The positive news, however, is some analysts believe that there are a few catalysts that have the ability to outperform in the future.

Kavan Choksi Japan– The three factors that can turn the economy of Japan around

According to business and finance expert Kavan Choksi Japan, there are three factors that can turn the economy of the nation around, and they are technological leadership, the policy of Abenomics, and the interest rate hikes by the Federal Reserve.

According to him, when it comes to the interest rate hikes by the Federal Reserve, the stocks in Japan have received a significant boost. The victory of Donald Trump in the USA resulted in the value of the dollar soaring, and the value of the Japanese Yen dropped. The Yen that became weaker helped the stocks of the nation outperform several developed countries in the weeks after the election. Since this time, the stores in Japan have been underperforming against the US equities as the USD has given up a lot of its gains in the period from January 2017 to the latter half of May of the same year.

The rise of Abenomics in Japan

The economic policies of Shinzo Abe, commonly referred to as Abenomics, have been relatively slow to begin; however, there have been several real improvements in the economy of Japan. The goal of the policy relates to the use of monetary easing, structural reforms, and fiscal stimulus. These factors are helping Japan to improve when it comes to the development and growth of its economy, which had been affected because of the lost decade.

Technological leadership

Japan has always been a great leader when it comes to technology and robotics in the country and Asia. However, most of the time, medium-scale firms churned out these developments over multi-national giants. For instance, there is a firm named Nidec that makes about 75% of the motors that are deployed in hard disk drives, while TEL manufactures about 80% of the nation’s etchers that are deployed for making LCD displays.

In Japan, it has been seen that big names like Sony, Panasonic, and Sharp are losing their share to other smaller firms. The latter, however, is dominating in their respective business niches, and this is good news for the nation.

Kavan Choksi Japan adds that several international investors in the market are finding these smaller companies compelling avenues for investments. They need more confidence in the larger ones that could be susceptible to market crashes in the future. They are aware that several of the more prominent companies are suffering from losses in the market share, and this is why they are banking more on the smaller firms that are deemed safer for investments.