4 biggest growth strategies Japan investors are looking for
'Extremely high expectations', says analyst.
According to Nomura, the Cabinet is scheduled to adopt a growth strategy on 14 June. It noted that the growth strategies that investors would like to see are (1) deregulation, (2) expanded acceptance of immigrants and boosts to job liquidity, (3) corporate tax breaks and effective use of financial assets, and (4) special zones, industrial and corporate metabolism, wage increases, etc.
Investors have extremely high expectations for the growth strategies. Whereas 75% said they thought the strategies would have a positive effect on Japanese equities, only 14% thought they would be negative.
In our research to date, we have yet to find any supporting evidence to back up such expectations. In our view, the LDP is not necessarily a monolith when it comes to corporate tax breaks. We think the debate over special zones will create some obstacles for the Ministry of Finance. As regulatory reforms usually have a negative effect in the short term and a positive effect in the long term, we think specifics are unlikely to be revealed until after the Upper House elections.