Another way to feel cheery for Asia is that excluding Japan, Asian market valuations are below their five-year average even as earnings growth in the high teens can be expected, especially from Korea and Taiwan.
Asia, as a whole, is set for a better 2024 compared to this year, as central banks of this region hold on to rates along with the US Federal Reserve, so as to discourage funds from exiting. Later in the year, with the US economy heading for a soft landing, regional markets can enjoy a relief, thanks to a generally weaker US dollar, which makes it less attractive to move funds to the US, says wealth manager UBS.
With this as the backdrop, Asian central banks might then cut their rates by an average of 50 basis points in the second half of 2024, which will help create some tailwinds for regional equities.
