The Japanese stock market rallied in 2017, surging past levels last seen in the early 1990s. A sustained recovery in global trade, as well as strong domestic sectors and continuous cost rationalisation provided a boost to Japanese corporate earnings, which grew at a much stronger pace than expected.

The Japanese stock market rallied in 2017, surging past levels last seen in the early 1990s. A sustained recovery in global trade, as well as strong domestic sectors and continuous cost rationalisation provided a boost to Japanese corporate earnings, which grew at a much stronger pace than expected. In aggregate, net profits in the first half grew by around 20% year-on-year, beating estimates and consensus by a wide margin.

From a bottom-up perspective, our meetings with management indicated that demand recovery was well underway across a wide range of industries.



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