Japanese equities could be set for a change in fortunes after the Liberal Democratic Party’s election in December.
The country’s stock market has rallied strongly since mid-November on expectations of the change in government, leading the Topix to end the year with an 18% gain the first time Japan has outperformed global equities in seven years.
Investors are also optimistic about the appointment of a new central bank governor in April and a consumption tax hike in the autumn, as well as other positive trends.
“We think Japanese equities will break out of long years of undervaluation in 2013,” said Nomura in a bullish...
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