SOURCE: Russell Investments

Russell Investments

November 21, 2014 11:35 ET

Japanese Equity Market Positive in November as Direction of Abenomics Looks Uncertain: Russell Indexes

Russell Expert Sees Parallels for Japan With the U.S. Equity Market of 2012 and 2013

SEATTLE, WA--(Marketwired - Nov 21, 2014) - Investors are focusing on Japan this week as they digest Prime Minister Shinzo Abe's recent announcements of a snap election and a delay in a planned consumption tax increase, signaling an uncertain future for 'Abenomics.'

As investors weigh these announcements, Japan's equity market has been slightly positive this month, with a +0.5% return for the Japan country constituent within the Russell Asia Pacific Index as of 18 November. This return is notable, as in this same period the Russell Asia Pacific Index (-0.8%) and more than half (7 of 13) of its country constituents had negative returns. For the year-to-date as of 18 November, Japan's equity market constituent returned +8.1% relative to a +13% return for the Russell Asia Pacific Index.

Russell Investments Global Head of Investment Strategy Andrew Pease on Japan:
"We see parallels for Japan with the U.S. equity market in 2012 and 2013, with extremely positive monetary policy yet only patchy evidence of economic strength in the early stages of recovery. Our positive view on cyclical factors in Japan assumes the economy is on a very slow upward trajectory. Prime Minister Abe's plan to delay the consumption tax supports this theme by removing what we believe to be one of the main threats to the growth outlook in 2015 -- excessive fiscal tightening."

For more information on the Russell Asia Pacific Index, go to the Russell Indexes website.

Russell Asia Pacific Index Returns

Russell Index / Index Country Constituent   November MTD a/o 11/18   2014 YTD as of 11/18
Russell Asia Pacific Index   -0.8%   13.0%
Russell Asia Pacific Index - Japan   0.5%   8.1%
Russell Asia Pacific Index - Australia   -2.2%   14.2%
Russell Asia Pacific Index - China   -1.5%   13.9%
Russell Asia Pacific Index - Hong Kong   -0.2%   17.3%
Russell Asia Pacific Index - India   1.3%   50.3%
Russell Asia Pacific Index - Indonesia   0.0%   37.0%
Russell Asia Pacific Index - Korea   -3.4%   1.5%
Russell Asia Pacific Index - Malaysia   -4.2%   7.2%
Russell Asia Pacific Index - New Zealand   4.5%   27.0%
Russell Asia Pacific Index - Philippines   0.6%   35.4%
Russell Asia Pacific Index - Singapore   0.2%   14.1%
Russell Asia Pacific Index - Taiwan   -2.2%   13.9%
Russell Asia Pacific Index - Thailand   -0.9%   38.3%

Source: Russell Investments. Returns are total returns (reflect reinvestment of dividends and distributions) and are denominated in euros.

The Russell Global Index measures the performance of the global equity market based on all investable equity securities, and is constructed to provide a comprehensive and unbiased barometer for the global segment. The Index includes more than 10,000 securities in 47 countries, and covers 98% of the investable global market. All securities in the Russell Global Index are classified according to size, region, country and sector; as a result the index can be segmented into more than 300 distinct benchmarks.

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Global equity involves risk associated with investments primarily in equity securities of companies located around the world, including the United States. International securities can involve risks relating to political and economic instability or regulatory conditions. Investments in emerging or developing markets involve exposure to economic structures that are generally less diverse and mature, and to political systems which can be expected to have less stability than those of more developed countries.

Investments in emerging or developing markets involve exposure to economic structures that are generally less diverse and mature, and to political systems which can be expected to have less stability than those of more developed countries. Securities may be less liquid and more volatile than US and longer-established non-US markets.

Opinions expressed by Mr. Pease reflect market performance as of November 18, 2014 and are subject to change at any time based on market or other conditions without notice. Past performance does not guarantee future performance.

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