Can Japanese stocks become attractive soon?

The play on Japan's plunge
The play on Japan's plunge   

Japanese equities may soon look attractive, BlackRock's global chief investment strategist told CNBC on Friday.

Russ Koesterich's comment came soon after Japan adopted negative interest rates, and fears that the U.S. might mirror the policy helped ignite U.S. market volatility.

"The movement toward negative rates by central banks is going to be problematic in general because that is a tax on the banks," Koesterich said on "Closing Bell."

Negative rates remain a concern for the markets, as the Japanese yen strengthened to trade at $110.98 against the dollar on Thursday. The stronger yen raises questions about whether the Bank of Japan will be forced to further ease interest rates.


In the same vein, more easing in Japan might indicate greater strain in the country's financial sector. The strategist argues, however, that the Japanese yen is a greater issue for exporters than for the financial sector.

Still, he noted, "banks anywhere are going to be hurt if you continue to see central banks use negative rates as their primary policy tool."

He contends that if fears of a global recession are overblown, Japanese stocks are a buy.

"Japan looks to be one of the markets that's the cheapest, and arguably the most oversold right now," he said, recommending the Japanese manufacturing and utilities sectors.

— CNBC's Leslie Shaffer contributed to this report.