As most economies struggle to deal with the economic fallout from the spread of the COVID-19 omicron variant, Japan is boasting high vaccination rates, low inflation, and favorable growth prospects. And given Goldman Sachs’ (GS) and Morgan Stanley’s (MS) bullish outlook on the country’s growth prospects, we think it could be wise to bet on fundamentally sound Japan-based stocks Honda Motor (HMC), Sumitomo Mitsui Financial (NYSE:SMFG), and Canon (CAJ). Let’s discuss.While most economies are still grappling with the rapidly spreading COVID-19 omicron variant, Japan is boasting a high vaccination rate. According to Statista, as of November 30, 2021, more than 72% of the third-largest economy’s population was fully vaccinated (two doses). The country is also accelerating COVID-19 booster shots and securing oral medicines, which will likely help the economy recover faster.
According to a Reuters report, the Japanese government is considering raising its economic growth forecast for fiscal 2022, accounting for its record $490 billion stimulus package. In addition, Goldman Sachs Group Inc. (NYSE:GS) and Morgan Stanley (NYSE:MS) provided a positive outlook on Japan’s growth prospects, given its low inflation, cheap valuation, and high vaccination rates. They have set a 2,250 12-month target for the benchmark Topix index.
Given this backdrop, we think it could be wise to bet on quality Japan-based stocks Honda Motor Co., Ltd. (HMC), Sumitomo Mitsui Financial Group , Inc. (SMFG), and Canon Inc. (CAJ). They are trading at discounts to their peers and have immense growth potential.