Japan stocks are BlackRock's favourite equity play
BlackRock Investment Institute Highlights Japan Stocks and Inflation-Linked Bonds
Japan Stocks Favored by BlackRock
The BlackRock Investment Institute (BII) announced on Tuesday that Japanese stocks are its top equity investment choice. This preference is driven by the return of mild inflation, shareholder-friendly corporate reforms, and a Bank of Japan cautiously normalizing its policy rather than tightening.
"(Japanese equities are) our highest conviction equity view thanks to support from the return of mild inflation, shareholder-friendly corporate reforms and a Bank of Japan that is cautiously normalizing policy – rather than tightening," said BII, an arm of U.S.-based investment firm BlackRock that provides proprietary investment research.
Inflation-Linked Bonds Attractive on Strategic Horizon
In its mid-year outlook, BII expressed a positive stance on inflation-linked bonds. The prospect of higher-for-longer policy rates, along with large fiscal deficits, makes these bonds an attractive investment on a strategic horizon.
Global Investment Opportunities
BII also highlighted investment opportunities in specific countries. They believe that Mexico and India stand to benefit significantly from the rewiring of supply chains in the long term.
"On a country level, Mexico and India should benefit from rewiring supply chains in the long term," BII added.
Frequently Asked Questions (FAQs)
Q1: Why does BlackRock favor Japanese stocks?
BlackRock favors Japanese stocks due to the return of mild inflation, shareholder-friendly corporate reforms, and a Bank of Japan that is cautiously normalizing policy rather than tightening.
Q2: What makes inflation-linked bonds attractive?
Inflation-linked bonds are attractive due to the prospect of higher-for-longer policy rates and large fiscal deficits, according to BII's mid-year outlook.
Q3: Which countries does BlackRock see benefiting from supply chain rewiring?
BlackRock sees Mexico and India benefiting from the long-term rewiring of supply chains.
Q4: What is BlackRock Investment Institute?
The BlackRock Investment Institute (BII) is an arm of U.S.-based investment firm BlackRock that provides proprietary investment research and insights.
Q5: What is the strategic horizon referred to by BII?
The strategic horizon refers to the long-term investment outlook and strategy considered by BII in its investment recommendations.
