Politics is the catalyst to unlock value in equities

ON JAPAN

Jupiter's Simon Somerville says reformist policies are the only way Japanese equities will outperform again

Political uncertainty has been a serious hindrance for Japanese equities in the past year. Despite many Japanese companies beating earnings forecasts, poor investor sentiment has caused the market to underperform most of its global peers since September 2009 when the Democratic Party of Japan (DPJ) swept to power following a land slide election victory. Although the DPJ and its leader Yukio Hatoyama initially looked determined to stimulate growth and squeeze the country’s extensive bureaucracy, his inability to deliver on election promises slashed the popularity of his coalition cabinet....