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A pedestrian walks past an electronic board displaying the Nikkei's movements outside a brokerage in Tokyo October 25, 2013.
A pedestrian walks past an electronic board displaying the Nikkei's movements outside a brokerage in Tokyo October 25, 2013.
(YUYA SHINO/REUTERS)

Three reasons to buy Japanese stocks

If seesawing stocks are making you wonder about the future direction of the S&P 500, spare a thought for Japan’s Nikkei 225: It’s the worst among developed market indexes this year after slumping 10 per cent; yet it is among the best since the start of 2013 with a gain of 40 per cent.

In other words, it’s absurdly high and worryingly low at the same time. But Julian Jessop at Capital Economics offers a few points on why Japanese stocks should be able to shake off the uncertainty with a rally to 17,000 by the end of the year. If he’s right, his target implies a gain of more than 16 per cent.