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Strong employment figures may fuel the Japanese stock market

Friday, September 8, 2006

4626

Weekly Special - 425 Minth Group

Although the US GDP for the second quarter has been revised upward from previous 2.5% to 2.9%, the consumer confidence index fell from 107.0 in last month to 99.6 and the Chicago purchasing managers’ index in August declined from 57.9 in July to 57.1. Furthermore, the core consumer spending rose only by 0.1% MoM. We believe that the US economy slowdown gradually and the concern of inflation has been eased. Investors now believe that the Fed will not raise interest rate in September.

On the other hand, Japan’s unemployment rate fell to 4.1% in July, compared with 4.2% in June. The job-to-applicant ratio increased to 1.09, the highest since June 1992. With the recovery of Japan economy, companies have to hire more employees. We are optimistic on the Nikkei 225 index, which believe to keep surging.

Recommendation:

Investors may choose the appropriate investment vehicle, which conforms to your risk appetite. Those who are risk neutral are suggested to pick Henderson HF-Pan Japan Equity (investing in large enterprises), which boasted good performance with one-year yield 31.9% and three-year yield 79.4%. For more information, please visit www.henderson.com

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Strong employment figures may fuel the Japanese stock market

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