Morgan Stanley Analysts Favor Japanese Equities Over China
Investing.com– Morgan Stanley (NYSE:MS) analysts continue to recommend Japanese equities over those in China, citing increased growth concerns for the latter, particularly due to new trade challenges from the U.S.
MS maintains an Overweight position on Japan, Australia, and India, while it is Underweight on China. Their preference for Japan is buoyed by recent weakness in the yen, given the country's significant export-oriented sectors.
Following Trump’s declaration as the winner of the 2024 presidential election on Wednesday, global markets experienced a rally. However, Chinese markets lagged, as Trump has promised to introduce steep import tariffs on China.
MS remarked that any increase in tariffs would likely negatively impact growth. They also mentioned that these tariffs could diminish the economic boost anticipated from major stimulus initiatives in Beijing.
Earlier this week, China’s National People’s Congress commenced a four-day meeting, with expectations to outline plans for enhanced fiscal support for its economy, with announcements anticipated by Friday.
Chinese markets had surged in early October on the possibility of more stimulus measures from the Chinese government, but the rally has since cooled amid uncertainties regarding the scale and timing of these measures.
In contrast, Japanese stocks surged sharply following Trump’s victory, as the yen fell to three-month lows against a strengthening dollar.
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