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Japanese equity funds reporting gains as economic growth exceeds expectations

Jeffrey Tan
Jeffrey Tan9/4/2017 08:00 AM GMT+08  • 7 min read
Japanese equity funds reporting gains as economic growth exceeds expectations
(Sept 4): Improving economic prospects are drawing investors to Japanese equities. The world’s third-largest economy grew at a faster-thanexpected pace of 4% in the second quarter of this year, marking the country’s sixth consecutive quarter of growth
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(Sept 4): Improving economic prospects are drawing investors to Japanese equities. The world’s third-largest economy grew at a faster-thanexpected pace of 4% in the second quarter of this year, marking the country’s sixth consecutive quarter of growth. The consensus forecast was for growth of 2.5%.

Data from preliminary estimates suggests the growth was led by strong business investment and consumer expenditure. Moreover, the unemployment rate has been declining since the global financial crisis in 2008. It hit a record low of 2.8% in July. The ratio of open jobs to applicants was 1.52, according to the Ministry of Health, Labour and Welfare, the highest since the economic boom in 1974.

Singapore-registered Japanese equity funds have gained in tandem with the impressive economic growth and mostly outperformed the broader benchmarks. The Nikkei 225 index has returned 2.7% this year, and the TOPIX 100 has returned 6.6%. Meanwhile, Morningstar data shows that the top 10 funds available to Singapore investors have all done better.

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