Deputy Chief Economist

Sharmila Whelan

Independent and original Asian investment research

Aletheia Capital

Aletheia Capital (HK) Ltd. (previously known as Asianomics) combines the extensive knowledge of its experienced team with technology and regulatory changes to disrupt Global Markets business in Asia. The firm is completely independent with no conflicts of interest either on Investment Banking advisory or Capital Markets execution.

Macroeconomics

<p>The Japanese stock market is down in the current year to date, like other regional bourses but on a relative basis the Nikkei 225 is an outperformer, having fallen the least among Asian markets. We continue to maintain an overweight call on Japanese equities in our regional portfolio. Economic activity contracted in 3Q18. This is a temporary setback. Underlying fundamentals including corporate profits are strengthening and the business cycle is increasingly led by domestic demand. We expect that liquidity will remain plentiful (good news for asset prices) even as the Bank of Japan continues to tweak monetary policy at the margin.</p>

The Japanese stock market is down in the current year to date, like other regional bourses but on a relative basis the Nikkei 225 is an outperformer, having fallen the least among Asian markets. We continue to maintain an overweight call on Japanese equities in our regional portfolio. Economic activity contracted in 3Q18. This is a temporary setback. Underlying fundamentals including corporate profits are strengthening and the business cycle is increasingly led by domestic demand. We expect that liquidity will remain plentiful (good news for asset prices) even as the Bank of Japan continues to tweak monetary policy at the margin.

MSCI AC Asia ex Japan Index (MXASJ INDEX)

Japan - Regional Outperformer Despite 3QGDP Setback