According to Citi Private Bank, Asian markets have a better position than the U.S. and Japan and China are top choices.

Ken Peng of the bank’s Asia Investment Strategy said that inflation in Asia is not as severe as it is in the United States.

Peng explained that Citi has recently increased its allocation of assets to Japan and China. “Street Signs Asia”On Friday.

He said, “These are our top choices for the region.”

Peng said that Japan was the “cheapest of developed markets”, and its historical averages are below it.

Japan has a “fairly robust earnings growth,” with a falling price and rising earnings ratio.

The possibility that the Japanese yen might weaken due to the widening yield gap with the U.S. is a positive, he added. Exports benefit from a weaker currency because it lowers the cost of products that are sold abroad and makes them more competitive.

Peng stated that Japanese stocks are attracting more global investment due to improved corporate governance. However, the country continues to be a crucial part of technology’s supply chain.

“Because of this collection of interesting points, and at a time when the U.S. is becoming shakier, you’re likely to see more inflows for Japan — and that’s why we’re relatively more positive there,” he said.

Peng indicated that China would see both fiscal and monetary policy easing while they wait.

The Federal Reserve has signaled that it’s ready to raise interest ratesThe era of easy money may be over. China however has made significant progress in the last weeks. cut interest ratesIt is doing this in an attempt to improve its economy.

Peng stated that there was potential for China to have policies that expand sufficiently to reduce the credit spread.

Bond prices rise as China’s interest rates fall. The U.S. interest rate is increasing, but bond prices will fall. This could provide China an opportunity to be outperform.

“What we want is for China become a sort of [an]”Alpha opportunity in high-yield fixed income this year,” he said.