Japan got caught in the tech selloff. Now it’s time to buy the dip, says strategist.

London-based research boutique Longview Economics is advising investors to buy the dip in Japanese equities following a tech-driven pullback. The benchmark Nikkei 225 equity index sits 8.4% below its record closing high reached on June 25, triggered primarily by a sharp selloff across major technology and semiconductor names amid cooling artificial intelligence sentiment. Harry Colvin, senior market strategist at Longview, argues that Japanese equities now meet three key criteria for attractive entry points: technically oversold conditions, strong upward earnings momentum, and compelling valuations after a six-month price-to-earnings de-rating. Rapid earnings growth of roughly 19% year-on-year in dollar terms supports the bullish stance, alongside low recession risk and loose financial conditions. Macroeconomic indicators also signal accelerating cyclical momentum. Japan's manufacturing PMI climbed to 55.1, near historical highs since 2004, while machine tool orders surged 50.4% year-on-year, boosted by semiconductor capex and a competitive weaker yen. Additionally, manufacturing and construction employment grew 2.5% year-on-year in June, prompting Longview to reiterate an overweight strategic allocation.