JPMorgan Chase: Japanese stocks are being sold off far more than US stocks, need to continue monitoring the risk of US economic recession

JPMorgan Chase released a research report, indicating that as of yesterday's closing price, the TOPIX index has fallen by 24% from its high on July 11, and the Nikkei 225 index has fallen by 25%. The Bank of Japan and the Federal Reserve of the United States announced their interest rate decisions at the end of July. In addition, concerns about the U.S. economy entering a recession and the risk of the Japanese yen appreciating seem to be the main reasons for this recent decline after the U.S. released weaker-than-expected employment data on August 2. The bank pointed out that even if the yen is expected to rise to 140 against the dollar, the overall market decline cannot be solely explained by foreign exchange effects. It also believes that the market is factoring in the risk of a U.S. recession. JPMorgan Chase stated that it is necessary to continue monitoring the risk of a U.S. economic recession, but even if a recession does occur, it believes that funds buying at low levels will support relative performance, as the selling pressure on Japanese stocks has been much higher than that on U.S. stocks, and corporate reforms and economic normalization also have a positive impact on Japanese stocks. Furthermore, the bank believes that the recent 25% cumulative decline in Japanese stock prices over the past few weeks is an overreaction compared to other markets. Considering factors such as the progress of corporate reforms, news of increased share buybacks, and the expected rise in real wages, the bank suggests that investors take advantage of the current downward pressure on Japanese stocks to buy at low levels