This morning I attended the presentation by Eiichi Oikawa, Managing Director of Daiwa SB Investment (Singapore) Ltd. Eiichi Oikawa is managing DBS Japan Growth Fund.
There are some insights from him which I share the same view.
After earthquake, Japan’s massive injection of money, 38 trillion yen (S$570 billion) may trigger the end of tight monetary policy for the past two decades. The lose monetary policy may lead to a weaker YEN, and these are good for the economy in the long run.
The disaster could reduce GDP growth by 0.5-1.0% in Q1 FY2011. However, on the other hand, reconstruction-related demand could boost GDP growth by 0.3-0.5% in 2H FY2011 and 0.4-0.7% in FY2012. So afterall, the gross GDP is not much affected as most of the people think.
Two weeks ago, I urge investors to be very careful when trying to catch Japan’s stock market. Mr Oikawa shares the same view as he feels the market will probably be trading in a range before a double dip in the mid of the year. For long term investors, that could probably be an opportunity to embark on the recovery.
Japan market has been historically correlated with US market. As the earning season is coming, investors should pay attention to what is happening in USA.