Japan is experiencing deflation for the first time since 2013. It was hoped that the Bank of Japan would introduce more monetary easing but equity markets were disappointed. As a result, the yen rose significantly which is rarely good for the share market.
The Bank of Japan reduced its economic forecasts to 1.2% from 1.5% and commented that further monetary easing is possible as risks to economic activity were skewed to the downside.
We are moving lighter on Japanese equities as a result.