Strategists Say Election Clouds Outlook for Japanese Markets
- Japanese stocks, yen attractive once political situation calms
- Overseas investors focusing on corporate governance reforms
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Political uncertainty will likely weigh on sentiment for investors in Japanese assets after the ruling coalition led by the Liberal Democratic Party failed to win a majority in parliament for the first time since 2009. The yen weakened, and Japanese stocks gained on Monday morning.
Some may be looking to buy on dips, and global investors are still pinning hopes on Japan’s improving corporate governance as a factor to buy equities, even after a gamble by Prime Minister Shigeru Ishiba to call a snap lower house election backfired. Public support for the LDP has nosedived after revelations last year that party members were secretly enriching themselves with funds from supporters.