Goldman Sachs is increasing its allocation to Japanese stocks to overweight.

Research report shows that Goldman Sachs has raised its allocation of Japanese stocks from "neutral" to "overweight". This reflects the view of Goldman Sachs' Japanese investment portfolio strategy team, which has raised its 12-month target for the Nikkei index from 3900 points to 4300 points, on the grounds that they believe that Japanese Prime Minister Naoto Kan's recent election victory is likely to drive more net inflows of foreign capital and valuation expansion at the index level. Goldman Sachs strategists are bullish in the first half of the year on Japanese stocks related to defense, key resources, shipbuilding, electric power resources, the theme of American reindustrialization, and corporate governance reform.