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Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Article / 12 November 2014 at 7:26 GMT

Japanese equities extend upwards trend on Bank of Japan policy

Head of Equity Strategy / Saxo Bank
Denmark
By Peter Garnry
 
Our conviction buy list portfolio on Asia Pacific equities was 1% the past week compared to -1.1% for MSCI Asia Pacific. The outperformance was driven by gains at Yamada Denki (+9.2%), Sharp (+2.5%) and Panasonic (+1.9%).

Asia Pacific equities top picks performance










 
The portfolio's outperformance has much do with the performance of Japanese equities in general. Since the long-term breakout in the Nikkei 225 following the Bank of Japan's decisions to target the size of their balance sheet the index has moved higher. The trend follows in lockstep with the weakening JPY against the USD, and consensus in the market seems to be that you cannot miss this train. As a result we have been positive on Japanese equities on a tactical level since BoJ's shift in monetary policy and as a long as the trend builds strength we continue to maintain that view.

Nikkei 225 Index since October 2013 
Nikkei 225 share price
Source: Saxo Bank

Below is our quant model's updated conviction buy list on Asia Pacific equities.

Asia Pacific equities top picks
 

– Edited by Clare MacCarthy


Peter Garnry is head of equity strategy at Saxo Bank – the home of social trading

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Conviction Buy List - Asia Pacific equities

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