Comgest’s Kaye keeps faith in Japanese growth stocks

The Bank of Japan (BoJ) decided not to push interest rates further into negative territory on 21 September.

Richard Kaye, portfolio manager of the Comgest Growth Japan fund, believes that in the aftermath of the BoJ’s meeting, the growth potential of Japanese companies should continue to be rewarded in the long-term.

He said it removes the sense of crisis that was created by the first negative interest announcement in January.

“The BoJ believes that the current stimulus is working, that properly measured inflation is returning to the Japanese economy and that emergency measures can be put on hold for now,” Kaye explained.

The Comgest Growth Japan portfolio manager said the restoration of pricing power has been seen at a number of companies including clothing firm Uniqlo, global motor manufacturer Nidec as well as indoor heating and air conditioning systems’ specialist Daikin.

“Faith in Japanese growth stocks should continue to be rewarded in the long-term by the reconfirmation that Japan is not simply a defensive value market, but a dynamic opportunity when companies’ potential is realised,” Kaye assessed.

The Comgest Growth Japan fund had €121.8m in assets under management as of 31 August 2016.

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