Stock markets are set to see losses ahead, and Japanese stocks could wind up being the hardest hit, warns SEB’s Sean Yokota.

“For the next couple of months, I think you’re going to see some downside risk, especially going into the fall,” Yokota, Singapore head of markets at the firm, told CNBC’s “Squawk Box Asia” on Thursday. “I think stock markets are in for a correction.”

He said Japanese markets could “suffer the most in this environment” as the country struggles with rising Covid cases as well as lackluster inflation.

Japan is struggling to contain the spread of the highly contagious delta variant. Daily new confirmed cases have spiked nearly 500% from their July 1 levels, based on CNBC calculations using figures from Our World in Data. Japan’s markets have also tumbled in a similar period, declining more than 5% for July.

The country is considering expanding its Covid quasi-state of emergency to eight more prefectures, according to…

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