Michael Lindsell: What we're expecting from Japanese equities this year

The Japanese market peaked in mid-January and, one way or another, has been declining ever since. Now it is 21% below its peak in January. Looking at what has driven it down suggests investors anticipate cyclical earnings will be hit. The ten worst-performing sectors, all down between 31% and 43% from the 19 January to 21 December, include shipping, machinery, commodity cyclicals and electronics; all sectors that typically feature at the forefront of any earnings recession. Joining them also were banks and securities companies. Why investors need to look through Japan's macro deterrents ...