According to Fidelity International’s head of investments for Japan, Miyuki Kashima, Japan’s turning point came in 2012, with the launch of then-Prime Minister Shinzo Abe’s package of economic and financial market reforms prominently known as “Abenomics”. Since then, Japan has shown steady and stable growth, with drivers including regulatory reforms, corporate innovation, a stronger economy, and a larger focus on capital efficiency.
Japanese equities have been traditionally unpopular among international investors, given the long-held reputation of suffering from the “lost decades” marked by lacklustre GDP growth after the bubble burst in the 1980s. Yet, amid a series of reforms and positive moves that are finally appearing in a bigger way, the benchmark Nikkei 225 has steadily gained and has even recently reached a 33-year high.
From the perspective of analysts at Fidelity International, there are many undervalued Japanese stocks that investors are missing out on, especially on the back of major structural shifts and economic recovery, aside from several emerging tailwinds.
