Jesper Koll eyes Japanese stocks amid market sell-off: Here’s why

Jesper Koll – an expert director for Monex Group is open to “start buying Japan” after the benchmark Nikkei 225 tanked more than 12% on Monday. 

Japanese stocks saw their worst day since the “Black Monday” of 1987 as the Yen recorded a new year-to-date high of 142.09 against the US dollar today. 

Part of the weakness in Nikkei 225 may have been related to the global funds that moved to de-risk their portfolio amidst concerns of a looming US recession. The benchmark index is now in the red for the year after losing more than 20% in total over the past four weeks. 

Still, Jesper Koll remains positive about the prospects of Japanese stocks. 

Why is Jesper Koll bullish on Japanese stocks?

Jesper Koll cited increased investments, higher real estate prices, and improvements in capital stewardship as well as corporate governance for his constructive view on Japanese stocks despite the recent turmoil. 

He agreed that a stronger Yen could result in downward revisions in earnings but said the economic fundamentals of Japan remain “much, much more solid”. 

The Jesper Koll expert cited continued growth in domestic business investment expenditure and potential decline in the unemployment rate and tagged the land of the rising sun as “recession-proof” in his interview with CNBC today. 

Such strengths will eventually begin reflecting positively in the country’s capital markets, he added. 

UBS Global Wealth disagrees with Jesper Koll

Last week, the Bank of Japan raised its key interest rate to the highest level since the global financial crisis. The central bank also announced plans of cutting its pace of buying government bonds further rendered strength to the Yen. 

Against that economic backdrop, Kelvin Tay – the regional chief investment officer at UBS Global Wealth has a view on Japanese stocks that starkly contrasts that of Jesper Koll. 

He likened investing in Japan at present to catching a falling knife in a separate interview with CNBC on Monday. 

The only reason why the Japanese market is up so strongly in the last two years is because the Japanese yen has been very, very weak. Once it reverses, you have to get out. I think they’re all getting out right now.

The yen has gained sharply after the BOJ rate hike from its 38-year low of 162 to a higher of 142 this morning. 

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