'As Prime Minister Shinzō Abe meets with President Donald Trump in Washington D.C. this Friday, he should be given credit for being the first global leader to present a concrete proposal regarding Trump’s ‘America first’ pledge. Following the US withdrawal from the Trans-Pacific Partnership, and in light of an assertive China and uncertain US-China relations, both sides will be keen to cement a favourable agreement. The specific deal could create up to 700,000 US jobs over 10 years through railway and infrastructure investments. Japan seems willing to fund these projects with low-interest loans and by mobilising resources from its public pension fund. Investment-wise, Japan’s capital goods sector is the most likely direct beneficiary. The more positive Friday’s meeting between the two countries – and we suspect it will go well – the less likely Japan will be accused of currency manipulation by the US president.'
Rob Weatherston, manager, Old Mutual Japanese Equity Fund, Old Mutual Global Investors