For US investors, Japanese stocks are starting to make sense.
After trailing US shares for six years in US dollar terms, Japan’s TOPIX is finally beating them, rising 8.2 percent this year through Thursday compared with a 0.3 percent advance for the S&P 500. Overseas buyers have purchased US$17.7 billion in Japanese shares and futures in four weeks, Tokyo and Osaka bourse data show, as the TOPIX rallies without a tumbling yen eating into gains. The Nikkei 225 Stock Average closed above 19,000 yesterday for the first time in almost 15 years.
How much has a falling yen penalized investors in the past? In 2013, when Japanese shares posted the biggest advance this century during Japanese Prime Minister Shinzo Abe’s first year back in office, investors denominated in US dollars would have been better off in the S&P 500.
Now, with US shares the third-worst performer this year among 24 developed markets, money is shifting to Tokyo.
“This is the first time in a long time that the TOPIX has outperformed the S&P 500 in [US] dollar terms,” Singapore-based Alltus Capital fund manager Richard Whittall said. “That’s making foreigners think Japan is very interesting. Suddenly we have this amazing situation where there are no natural sellers in the market.”
After offloading Japanese cash equities in five of the first six weeks this year, overseas investors became net buyers for four straight weeks through Friday last week, according to the latest available data. They purchased ¥647.8 billion (US$5.34 billion) of stocks in Tokyo and Nagoya, according to the Tokyo bourse.
They also bought a net ¥1.5 trillion in large Nikkei 225 Stock Average and TOPIX futures contracts over the period, Osaka exchange data show.
The ¥2.15 trillion total was almost four times the amount of net buying of stocks and futures by foreign investors last year, bourse data show.
Yen weakness has been limited this year. The Japanese currency has fallen just 1.4 percent against the US dollar — while the euro tumbled 12 percent. In US dollar terms, the TOPIX has posted the biggest gains this year among 24 developed equity markets tracked by Bloomberg. The TOPIX climbed 0.9 percent to close at 1,560.33 yesterday.
“As the market performs even though the yen is fairly stable, it’ll become harder for foreign investors to ignore Japanese stocks,” LGT Capital Partners Ltd strategist Mikio Kumada said. “They’ll continue to pile in, helping drive the market higher.”
In previous years of the Abe rally, stock gains came with a tumbling currency. When the TOPIX surged 51 percent in 2013, its most since 1999, the yen fell 18 percent against the US dollar.
The TOPIX’s 24 percent advance that year in US dollar terms fell short of the S&P 500’s 30 percent increase. Last year, an 8.1 percent jump for the TOPIX coincided with a 12 percent drop in the yen. The TOPIX fell 4.9 percent in US dollar terms.
“Japan performed extremely well if you were a fund manager who owned Japanese equities and hedged,” CLSA Ltd chief equity strategist Christopher Wood said. “But not all long-only equity investors can hedge and the people who can’t definitely got hurt by the currency.”
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”