On June 26, Talaria Capital said Japan’s recent stock market rally could cool in the second half of the year as the highly cyclical market is vulnerable to an expected global economic slowdown.
Hugh Selby-Smith, co-chief investment officer at the fund manager, said exporters in Japan, the world’s third-largest stock market, are expected to suffer as aggressive monetary tightening by major central banks could eventually slow global growth. Possibly below current levels by the end of 2023.
However, he also said that unless the Japanese economy returns to deflationary trends and business growth slows, Japan is expected to remain a “fertile hunting ground” for international investors to reinvest in the next three to five years.