Japan continues to struggle to shake off deflationary pressures as the November consumer price index fell for the ninth straight month. Bank of Japan Governor,Haruhiko Kuroda rejected claims the BOJ’s yield curve control and 2% inflation target may be too ambitious and that the central bank has room for more economic stimulus.
China’s 6.5% economic growth target may not be maintained, especially if it continues to compound the rising debt issues the country faces and creates too much risk.
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During 2016 we’ve been bullish on the Chinese equity markets which performed inline with our forecasts. The strength and the breakout in the Japanese equities on the other hand, caught us a little by surprise.
The breakout in the Nikkei has been fuelled by the BOJ’s broad-based equity ETF being program and the recent weakness in the Yen.
Chart – Nikkei
