UBS Global Wealth Management expects Japan’s cheaply valued stocks to extend their outperformance into 2024 amid a revival in domestic economic growth and gradual monetary policy tightening.

Value stocks will rally as the economy may post 3% to 4% nominal growth next year and the Tokyo Stock Exchange pushes for better returns on equity, Min Lan Tan, who leads the Asia Pacific chief investment office at one of the world’s largest wealth managers, said in an interview. “The underlying story for Japan is still that it is in the midst of a positive inflation loop.”