There is no doubt companies' sales and earnings are being hit across Japan.
The global reaction to the coronavirus has seen unprecedented restrictions on human movement and has had a direct impact on business practices.
Many companies across Japan have been characterised by strong balance sheets, net cash and in some cases not a single yen of debt.
This coupled with strong, capable management is where we find the best opportunities and despite short-term earnings being affected with varying levels of severity, most are managed in such a way that survivability is highly unlikely to be an issue.
When speculation rather than fundamentals drives markets, it is difficult to pinpoint the precise moment at which share prices bottom.
Given the strength of many companies' balance sheets and management, together with - in some cases - business models that have recurring annuity-style revenue streams, it seems possible that share price declines may be discounting a greater level of long-term business interruption than may actually transpire.
Make no mistake: earnings will be under significant long-term pressure, but over the longer term the structural tailwinds and commitment to continuous growth in shareholder return will remain unchanged.
While the impact of Covid-19 is unprecedented and more global in nature, we remain mindful of the same climate of delirium that swept global markets when SARS struck in 2003. At that time, share prices plunged as the number of daily reported cases continued to grow.
However, once the first evidence emerged that the number of new cases of the virus has been contained in the areas most affected, markets then bounced rapidly.
Consumption and production eventually recovered. While we have not yet reached that point, based on past pandemics it seems logical to assume A) that at some point the spread should be contained; B) thereafter markets will bounce sharply; and most importantly, C) that the future long-term value of a well-run company is ultimately unaffected by the short-term effect on earnings.
Richard Aston is manager of the CC Japan Income & Growth fund and CC Japan Income & Growth trust
• Companies have established strong market positions
• Companies have healthy balance sheets
• The future is uncertain; coronavirus is, as yet, not contained
• Short-term earnings are under pressure