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Premature “Buy Japan” call, according to Bank of America analysts

According to Bank of America analysts, calls to ‘Buy Japan’ are premature. The analysts maintain that while Japan’s economic recovery is promising, the country is still facing various challenges that may prevent it from meeting set targets. These include a potential rise in coronavirus cases, fiscal spending constraints, and reliance on external demand. The analysts point out that policymakers have recently set a more conservative growth target of 2.4% for fiscal 2021. Furthermore, the rise in inflation is pulling asset prices down, including Japanese stocks, which are down 0.86% so far for the year. The analysts conclude that global investments are encouraged to remain cautious until domestic consumption gains momentum and economic recovery is evident.