The font entrance of the Tokyo Stock Exchange (TSE) in Tokyo, Japan, on Monday, Aug. 5, 2024.
Noriko Hayashi | Bloomberg | Getty Images
Monex Group’s Jesper Koll says he is prepared to “start buying Japan” on the back of fundamentals still being “solid” in the country, even as Japanese markets on Monday experienced a major stock-sell off.
Earnings may be revised downwards due to the movement of the Japanese yen, but there have been improvements in corporate governance, capital stewardship, as well as an investment drive and increasing real estate prices, Koll told CNBC’s “Squawk Box Europe” on Monday. He added that fundamentals in the country are “actually much, much more solid”.
“I’m actually prepared to dip my toe into the water and start buying Japan,” said Koll, who is head of Japan at Monex Group.
Japan’s Nikkei 225 fell 12.4% on Monday, its biggest daily drop since 1987’s so-called “Black Monday,” as global markets pulled back. The move lower has deterred some investors, with Kelvin Tay, regional chief investment officer at UBS Global Wealth Management telling CNBC earlier on Monday that going into the Japanese market right now would be like catching “a falling knife.”
Japanese Finance Minister Shunichi Suzuki said the government was cooperating with the central bank and closely watching financial market moves with “grave concern,” Reuters reported. Suzuki added that foreign exchange levels were being watched by authorities.
Authorities last month intervened to shore up the yen, data from the country’s Ministry of Finance showed, after the yen hit a 38-year low against the U.S. dollar in July. A stronger yen typically puts pressure on Japan’s stock markets.
The intervention was followed by the Bank of Japan last week raising the benchmark interest rate to its highest level since 2008 and saying it would trim its purchase of Japanese government bonds.
But Monex Group’s Koll said he was “not at all” concerned about financial stability in the country. Japan’s banking system is well capitalized, and the exposure to global market gyrations is limited, he said.
“The exciting thing is that domestic business investment expenditure continues to grow, the unemployment rate in Japan will continue to fall unlike in the United States. … Japan is recession proof and sooner or later that’s going to start to be reflected positively in capital markets here in Tokyo,” he said.
