Since the New Year, Japan** has become the most beautiful boy in the world, with an increase of 17%, breaking through 39,000 points, a 35-year high. Since the beginning of this year, the increase has even exceeded that of Argentina, a strange country, and Argentina has inflation of 20% in January this year.
Today, I will talk about two things, 1. The four main reasons for Japan's strengthening. 2. Will investing in Japan now become a pick-up man?
1. Japan's current round can be traced back to September 2012 as Japan's prime minister, in the past 11 years, the Nikkei 225 index has increased by 343%, and our CSI 300 index has reached 58% in the same period, a difference of nearly 5 times. However, before that, Japan** was bearish for 22 years since 1990, and the Nikkei 225** was nearly 77% higher**.
There are four reasons why Japan is strong:
First, the economy is really strong, and corporate profits have improved. Japan has always had a headache with deflation, because in a deflationary environment, everyone saves money, does not borrow, invest, and does not consume, which has created what everyone calls Heisei wastewood, resulting in sluggish economic growth. **After coming to power, in order to get rid of deflation, he did not hesitate to print money frantically to make interest rates very low, and at the same time issued treasury bonds on a large scale and engaged in investment and construction. In this way, the Japanese economy has really stimulated, the CPI has been above the 2% inflation target for 20 consecutive months, and the overall ROE, net profit margin, net profit and other profitability indicators of listed companies have risen.
Second, interest rates are low. As I mentioned earlier, Japan is printing money on a large scale, and the interest rate is very low, so low that the deposit interest rate is less than 05%, in this environment, when corporate profits improve, everyone wants to buy ** when natural funds are abundant. In fact, the investment strategy of "borrowing yen to buy Japanese stocks" has been derived, and Buffett did just that, he will issue bonds in 2023 and borrow 165.5 billion yen, speculating in Japan to make a profit, and because of the depreciation of the yen, there is less time to repay the money in dollars, and he won twice. Judging from the trend of Japan's **11-year bull market, it is highly correlated with the depreciation of the yen.
The third is to increase risk appetite and follow Buffett to copy homework. In April 2023, Warren Buffett, the "God of Stocks", has publicly stated that he will increase his weight in Japan**, and in the "2023 Letter to Shareholders", he is clearly optimistic about Japanese assets. In fact, Japan's bullish trend is closely related to foreign investment, and foreign capital has continued to have a net inflow in the past two years.
Fourth, the Bank of Japan will buy **. In order to stimulate **, Japan directly asked the central bank to buy **, and directly held 7% of the **market value! If according to this ratio, our national team has to buy A-shares to reach 5 trillion yuan, and the current national team is only net 410 billion yuan, and there is still more than 10 times the space.
2. According to the analysis of the four conditions of Japan's strength just now, it can be found that Japan's market outlook cannot be too optimistic and should not enter the market.
First, because the Japanese economy has reached its inflation target of 2%, the Bank of Japan is ready to raise interest rates this year. This means that the Japanese economy may be under pressure, while market liquidity has decreased, market interest rates have also become higher, and three of the four major positives for Japan have been affected.
Second, as the Federal Reserve began to cut interest rates in the second half of this year, there is pressure on the yen to appreciate. As a result, there is a problem with the strategy of borrowing yen to buy Japanese stocks, and some foreign capital is under pressure to outflow.
The third is that with the fact that Japan's attractiveness is also declining. From the perspective of global comparison, Japan's outstanding advantages are high dividends and low valuation, which is somewhat similar to the low volatility of dividends in our A-shares. With the market, the dividend yield is definitely decreasing, so the attractiveness is also weakened.
Finally, at present, our domestic investment in Japan has been at a serious premium, and it is not worth buying it. Not only is it possible to take orders at a high level, but it also bears the risk of the premium disappearing. What does the premium mean, for example, this ** is worth 1 yuan, you have to 11 yuan**, 1 cent more is the premium. This premium will disappear at any time, and when it disappears, it becomes a loss.
In short, under the current circumstances, I will not give Japan ** a pick-up. Big A is in the limelight here, stick to it!
Pay attention to Brother Da Lin and take you to know the truth of finance.