Managers feel inflation will boost Japanese equities

The fund houses believe as inflation continues to climb, investors will not tolerate declining fixed interest returns and will seek to shift into the country’s recently ignored equity market. ResolutionAsset Japan fund manager Natasha Chetwynd argues the current Japanese equity market is cheap, with many stocks trading on eight to 12 times earnings. “The return of inflation in Japan is very good news after such a long period of deflation,” she says. “It might put pressure on margins but the declining returns from bonds might prompt investors to sell out of fixed interest and into equitie...