Japanese stocks rebounded sharply after selloff, JPMorgan bullish on medium-term potential

From Investing.com: 2024-08-11 04:01:03

Japanese stocks rebounded by 9% on August 6 after a sharp selloff worse than Black Monday. Real wage growth turning positive signals an end to deflation, boosting market optimism. Despite volatility, JPMorgan identifies support levels at 2,450 for and 34,000 for . Upside potential is expected in the medium term once turmoil subsides.

The selloff was triggered by unwinding JPY carry trades after the July 31 BOJ meeting, leading to JPY appreciation and global market plunge. JPMorgan notes potential risk of a US recession but remains bullish on Japanese stocks. Focus is on sectors resilient to JPY appreciation, with investment themes on cutting-edge technology, renewable energy, and defense.

JPMorgan emphasizes support from significant sell-off, wage growth, and corporate reform progress in Japanese stocks. Market volatility may continue, but potential medium-term recovery is seen once turbulence subsides. Upside remains for industrial electronics, IT services, financials, and consumer-related sectors post-volatility for investors.



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