Jesper Koll, chief economist at Merrill Lynch Japan, spoke yesterday at the 2006 Melbourne Financial Services Symposium. In addition to his open praise of Japan, he mentioned BHP Billiton (BHP) and Rio Tinto (RTP) as two commodity suppliers that would be big winners as Japan's economy continues to recover. Courtesy of an article by The Age, below is a compilation of comments made by Koll.
• "Australia's export prices is (sic) evidence of this resurgence in Japan's growth."
• "Japan is back as a reliable engine of economic growth and as a reliable and consistent supplier of capital to the rest of the world."
• "Now with the emergence of Japan you actually have a good balance with China, and combined, the two regions provide lots of demand and vigorous growth for Australia."
• Koll believes Japan's banking system is healthy and has excess capital that will generate growth in credit markets.
• Koll predicts that by the 2008 Beijing Olympics the Nikkei Stock Average could be at 25,000 yen.
• "The interesting thing is that Japanese companies have always been very competitive internationally, and that propels growth and profit."
I am not sure if this is a coincidence but Merrill Lynch London increased its target share prices for BHP and Rio Tinto yesterday. Click here for the details.
BHP 1-yr chart:
RTP 1-yr chart: