“The recovery in consumption is really what we are waiting for,” said Moriya. “When consumption finally recovers, sectors that are lagging behind will catch up with the rest, and it will have an upside impact on the market.”
Japan’s lagging consumption stocks will likely get a boost in the second half of the year, as signs of recovery in spending due to wage hikes kick in, according to some investors.
That’s expected to be a tailwind for domestic demand-focused sectors including food and retail, said Nozomi Moriya, Japan equity strategist at UBS Securities. Those sectors are among the smallest gainers on the Topix index so far this year, with the Topix retail gauge rising 8.8% and food firms climbing 7.9% at a time when the broad market advanced 22%.
