Puris: Trump's tariff policy and planning for the US economy have a significant impact on Japanese stocks.

Daniel Hurley, global stock portfolio expert at Puraishi, said that by the end of 2024 to the beginning of 2025, the main focus of the Japanese stock market will be on Trump's policies and plans for the U.S. economy, particularly his plans for tariffs and relationships with trading partners (especially China). These factors, along with Fed policy, will have a significant impact on global trade, currency, and Japanese exports. Corporate governance reforms are expected to continue to progress, and progress in the fourth quarter will need to be observed. Hurley stated that it is currently difficult to evaluate President Trump's policies, but his focus during the election has been on immigration and tariffs. For open, export-oriented economies like Japan, tariffs are clearly the biggest risk. Nevertheless, Japan has close relations with the U.S., particularly with President Trump, as the late former Prime Minister Shinzo Abe was the first foreign leader to meet with Trump during his first term in office. The Bank of Japan is closely monitoring inflation, particularly wage inflation, and cautiously tightening monetary policy. The Bank of Japan will remain patient and continue to tighten policy based on data. This is expected to continue to support the Japanese stock market; relatively loose monetary policy will keep interest rates low and keep the yen relatively weak (for exporters). With inflation appearing in Japan for the first time in 35 years, the restart of investment and consumption is expected to provide strong support for the economy. The health of the U.S. economy will be a key factor influencing the outlook for the yen, and investors should closely monitor U.S. macroeconomic data to assess the future trend of the yen. Hurley believes that a strong U.S. economy and a weaker currency will provide support for exporters and the overall Japanese economy and market. As companies generate higher profits and free cash flow, they will continue to face pressure in corporate governance reform and shareholder returns, providing additional impetus.