Fiscal Impulse Lifts Japan; Europe’s Alpha Lies in Sectors

BlackRock’s weekly commentary highlights fiscal expansion and structural reform as emerging return drivers beyond AI 

• Japan’s rising ROE, governance reform and nominal growth underpin an overweight stance, supported by continued fiscal spending.

• In Europe, dispersion dominates: pharmaceuticals and financials are preferred beneficiaries of demographic and capital-market reform trends.

• Long-duration government bonds remain underweight amid rising term premia and supply pressures tied to strategic fiscal expansion.

Is the next equity cycle less about U.S. tech dominance—and more about fiscal realignment? The full commentary expands on positioning.