Inflation not a problem in Japan: Asia Pac Asset Mgmt.

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Asian markets are weak lead by commodity producers as the gold tumbled to the lowest levels since December and on oil weakness as well.

James Chirnside , CIO of Asia Pacific Asset Management on speaking to CNBC-TV18 said, " Inflation at a domestic level in Japan is a good thing because it will bring out household savings into other investments, like stocks apart from bonds and deposits."

Excerpts from CNBC-TV18's exclusive interview with James Chirnside:

Q: What's your take on China in particular considering that inflation has decelerated to a certain extent since certain analysts are saying that the inflation cycle has in fact peaked, is that market attractive for you considering even though it's down by a percent?

A: China became terribly expensive based on very high and extreme degrees of speculative uptake and I think it's still in that corrective phase. It appears to be cheap but the problem in China is transparency. It is difficult to see just where the earnings are coming from and we have got to remember as a result of the correction in stock prices, and the sourcing of earnings by companies listed from trading in those stocks that there is a serious adjustment due.

Q: Considering Japan, it's in an inverse picture, inflation has accelerated, what's your take on Japan then?

A: Japan is a very different story to the rest of Asia in terms of inflation. It is not as severely impacted by inflation and in fact inflation at a domestic level is considered to be a good thing because it will hopefully hunt some of the enormous house hold savings that sit in Japan into other investments apart from deposits and bonds i.e into stocks.