Japanese bank Nomura has faith in Abenomics, predicting the Nikkei to hit 18,000 by the end of the year.
The Nikkei fell 6.4 per cent to 12,455.38 today, sending it into bear market territory.
But Nomura strategist Hiromichi Tamura doesn’t think this necessarily means investors should be bearish over the long term.
Assuming that Abenomics has not been defeated, we see no reason to become bearish on Japanese stocks, and recommend a bullish stance. We think the full impact of Abenomics on capex and household incomes has yet to be felt, which means that there are still substantial investment opportunities in these areas.
Tamura says investors should look for two things: stocks generating strong earnings and stocks that look likely to benefits from government growth strategies. Stocks to buy include Toyota, Toshiba, Honda and Mitsubishi Corp.