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Japanese equities
10 Feb 2017

Shinzō Abe: The risk taker

As Prime Minister Shinzō Abe meets with President Donald Trump in Washington D.C. this Friday, he should be given credit for being the first global leader to present a concrete proposal regarding Trump’s ‘America first’ pledge.

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Rob Weatherston, manager, Old Mutual Japanese Equity Fund, comments on the forthcoming Abe-Trump summit.

As Prime Minister Shinzō Abe meets with President Donald Trump in Washington D.C. this Friday, he should be given credit for being the first global leader to present a concrete proposal regarding Trump’s ‘America first’ pledge.

Following the US withdrawal from the Trans-Pacific Partnership and in light of an assertive China and uncertain US-China relations, both sides will be keen to cement a favourable agreement. The specific deal could create up to 700,000 US jobs over 10 years through railway and infrastructure investments. Japan seems willing to fund these projects with low-interest loans and by mobilising resources from its public pension fund. Investment-wise, Japan’s capital goods sector is the most likely direct beneficiary. The more positive Friday’s meeting between the two countries – and we suspect it will go well – the less likely Japan will be accused of currency manipulation by the US president.

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