Tokyo’s winning bid to host the 2020 Olympics may boost construction and tourism stocks today and give a lift to consumer confidence, playing into Prime Minister Shinzo Abe’s plan to revive the world’s third-biggest economy.
“Olympics-related stocks are yet to fully price in the decision, even though they’ve already outperformed,” Hiroshi Fujimoto, a Tokyo-based fund manager at Shinkin Asset Management Co., which manages 638.9 billion yen ($6.4 billion) in assets, said by phone on Sept. 3. “In the short term the entire Japanese share market will get a boost from celebratory buying and expectations for the event’s economic impact.”
Hosting the games can create new jobs and boost optimism as Japan seeks to overcome the economic effects of the 2011 earthquake and tsunami and a record debt that have been a drag on growth. Abe inherited the Tokyo Olympic bid when he won a landslide election in December, still capturing the prize may bolster his effort to drive the economic recovery by taming deflation and boosting consumer confidence.
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