Why Japan needs its multinationals more than ever

Japan

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With monetary policy weakening the yen and a consumption tax rise at home, Japan's multinationals are the key to solving the country's problems - and the best bet for investors, says Neptune's Chris Taylor.

Investing in Japan is all about multinationals with global dominance. For instance, companies in the TOPIX 150 index lifted their earnings per share (EPS) by over 96% for the year ending 31 March 2014, while the domestic economy showed sub-2% real growth, and the yen only declined by around 20% against the US dollar. Meanwhile, the government’s decision to hike consumption tax from 5% to 8% as of 1 April this year has disrupted the path of the economy. It brought forward consumption into the first quarter, at the expense of the second quarter. But taken together, the two quarters i...

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