Japan’s stocks have outperformed European stocks for many years, but investors are still not buying mazech.com

Photo: Akio Kon/Bloomberg

Japanese stocks have outperformed European stocks for many years, but investors are not still buying, raising concerns.

Since January this year, the Nikkei 225 in Japan has gained more than 10%, as of its Thursday close. In comparison, the pan-European Stoxx 600 has risen only about 3.43% year-to-date, while the S&P 500 is up 4.2% during the same period.

Japan is traditionally underweighted and “that’s been a massive mistake — versus Europe at least,” John Vail, the chief global strategist at Nikko Asset Management, said, adding that Japan “routinely outperforms Europe by a large margin.”

The Japanese market has performed “extremely well” since former Prime Minister Shinzo Abe took office for a second term in late-2012, Nicholas Smith, Japan strategist at CLSA, told CNBC’s “Street Signs Asia” on Monday.

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