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 (NYSE: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: