After a 34-year wait Japan’s stock market has reached a new record high, driven by optimism about corporate governance changes and attractive valuations.
Over the past year Japan’s equity market has experienced a notable resurgence as optimism about the end of deflation, attractive valuations and, most importantly, the transformation of corporate culture have drawn investors to the asset class.
This trend is continuing in 2024. We have seen substantial foreign inflows into the Japanese stock market this year, following on from 2023 when overseas investors purchased the biggest amount of Japanese equities, on a net basis, since 20141. With the Bank of Japan (BOJ) officially announcing the end of deflation by exiting its negative interest rate policy, Japan has signalled to the world that this time is, indeed, different.
Fidelity Japan Trust PLC (LON:FJV) aims to be the key investment of choice for those seeking Japanese companies exposure. The Trust has a ‘growth at reasonable price’ (GARP) investment style and approach – which involves identifying companies whose growth prospects are being under-appreciated or are not fully recognised by other investors.