Allianz Says Japan Stocks Will Defy Geopolitics, Yen Volatility.

ALLIANZ SE; INTEREST rates; STOCKS (Finance); SMALL capitalization stocks; INVESTORS; GEOPOLITICS; JAPANESE yen; GROWTH stocks

According to Koji Nakatsuka, the chief investment officer for Japan equity at Allianz Global Investors, the recent weakness in Japan's stock market due to Middle East tensions and currency volatility is temporary. Nakatsuka believes that solid corporate fundamentals and the long-term outlook for artificial intelligence will support the market, and he predicts that the Nikkei may return to its record high levels by the end of the year. He also suggests that domestic-oriented small-cap stocks will catch up with larger companies, and that the corporate reform campaign will eventually benefit smaller firms. Additionally, Nakatsuka advises caution with growth stocks due to high oil prices and uncertainty in China's economic recovery. Despite the Bank of Japan's recent exit from negative interest rates, Allianz remains overweight in banks and developers, as Nakatsuka expects the central bank to increase interest rates again in the second half of the year. The upcoming first-quarter earnings reports, particularly from tech shares, are expected to be positive, and the long-term outlook for automakers is improving. [Extracted from the article]

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