Talking Point  

The outlook for Japanese equities

  • Explain what the new leadership means for Japan
  • Identify drivers of Japanese economy
  • Explain how companies are innovating in Japan
CPD
Approx.30min
Investing in Japanese equities
How is Japan evolving against the backdrop of a changing economy, the pandemic and climate change?
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Investment markets have been turbulent over the past month as investors fear the consequence of the Omnicon Covid variant.

And although Covid has caused distortions and supply bottlenecks, economies have by and large adapted remarkably well to the vagaries of the pandemic.

The Japanese equity market is notoriously difficult to make money from, with issues around the treatment of minority shareholders combined with a sluggish outlook for the economy, and the composition of the Nikkei index, which is to a large extent comprised of value stocks, while over the past decade growth equities have been in vogue with investors. 

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But as global growth picks up, and the possibility of interest rate rises around the world has become central to investors' thoughts, the potential exists for a prolonged period of outperformance from value stocks relative to their growth counterparts. 

This report will look explore the future of Japanese equities and is worth an indicative 30 minutes' CPD.

CPD
Approx.30min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. True or false, according to Sam Perry, the large cash piles built up by Japanese companies is due to companies being very cautious following the economy and stock market crash in 1992.

  2. Why does Guillame Pallait say the yen is a safe haven currency?

  3. True or false. The Japanese market which remains firmly rooted at the lower end of global stock market valuation parameters.

  4. Which companies have thrived amid a steady decline in labour force, ageing society, low birth rates, shrinking domestic demand and deflationary environment in Japan?

  5. What is the value of the stimulus being pushed through by new prime minister, Fumio Kishida?

  6. The phrase 'turning into Japan' describes which economic conditions?

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You have successfully answered all the questions correctly, well done!

You should now know…

  • Explain what the new leadership means for Japan
  • Identify drivers of Japanese economy
  • Explain how companies are innovating in Japan

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