Rate hikes do not ‘matter too much’ for Japanese stocks

Rate hikes do not “matter too much” for Japanese stocks in in the medium to long term, says Stefaine Holtz-Jen of Deutsche Bank.

Why is Holtz-Jen bullish on Japanese stocks?

The Bank of Japan is expected to raise rates tomorrow – March 19^th, 2024.

But even if it doesn’t, “there will be 100% probability” that the central bank will move in April. So, the timeline of rate hikes won’t “shift the investment opportunity that there is in Japan”, as per Holtz-Jen.

Her view is in line with Kei Okamura – the senior vice president of Neuberger Berman who also recently forecast further upside in Japanese stocks as Invezz reported here.  

Note that the benchmark Nikkei 225 index is already trading at an all-time high.

Inflation in Japan matched expectations in February

Stefaine Holtz-Jen remains constructive on Japanese stocks because a rate hike is now “very well anticipated”.

On CNBC’s “Street Signs Asia”, she took a positive tone on the Nikkei 225 index today also because “it’s not a very big move” but a “signalling in the right direction”.

Her comment arrives shortly after the Statistical Bureau of Japan said core inflation in Tokyo stood at 2.5% in February – in line with expectations. At the time, Marcel Thieliant of Capital Economics said:

There’s nothing in today’s report that would prevent the Bank of Japan from ending negative interest rates next month.