NKY Nikkei 225 (alternate) : Bullish and Bearish Analyst Opinions

"She wants to make sure people improve their affordability... suspend two years consumption tax on the food... It could be a little bit dovish normalization." The combination of fiscal stimulus (tax suspensions/refunds) to boost consumer confidence and a central bank that is "afraid to drive too fast" (slow rate hikes) creates a "Goldilocks" scenario for Japanese equities. The market remains supported by liquidity while domestic demand is artificially stimulated. LONG broad Japanese equities (Nikkei/EWJ) and hedged equity (DXJ) as the macro environment remains accommodative despite the global tightening narrative. A sudden spike in JGB yields or the Yen strengthening rapidly beyond 150/140, which would hurt export-heavy indices.

Japan has moved from deflation to ~3% inflation. AG Wadah states, "Cash has been the king... But with the inflation out there close to 3%, cash is not the right assets to own... Stocks are the [better] assets." For 30 years, Japanese households and corporations hoarded cash because goods got cheaper. Now, inflation erodes cash value. This forces a massive rotation of capital out of savings/bonds and into the equity market to preserve purchasing power. LONG Japanese broad market indices. DXJ is preferred if the Yen weakens; EWJ for unhedged exposure. A return to deflation or global recession crushing export demand.