Why invest in the Japanese equity market?
Japan is the world's third largest economy and the largest creditor nation. After almost twenty years of low growth and intermittent deflation, an economic recovery has begun to take hold, driven by regional growth, a flexible exchange rate, and most importantly significant structural reforms which will improve financial transparency and rationality. Efforts in the past decade to improve corporate balance sheets and reduce corporate structural inefficiencies have finally produced a healthy overall starting point from which to grow. Furthermore, Japanese reflation is no longer a hope but a seeming certainty which should finally lift domestic demand and long term economic growth. With the possibility of capital rationalization from such sources as a privatized postal savings system, and as dividend yields continue to outpace government bond yields relative to other economies globally, the argument for a much higher equity index seems solid.
Dejima Asset Management LLP is an appointed representative of Quaero Capital LLP which is authorised and regulated by the Financial Conduct Authority. Copyright Dejima Asset Management LLP 2017. All rights reserved.