Why investors should not ignore Japan

Attractive dividend yields

Japanese equities in US dollar terms matched the MSCI World index from the 2012 inception of Abenomics through to last June, but since then have greatly faltered along with 12-month forward index EPS estimates.

The latter, however, has been trending up again in recent weeks. Overseas investors were massive sellers last year and so far this year too, leaving them quite underweight and vulnerable to positive surprises. Indeed, excluding the recent downdraft, Japanese stocks are about as cheap on a price-to 12-month forward EPS ratio as they have been since the Global Financial Crisis.  China's economic deceleration and trade disputes were the main worries for Japan, as was the weakness in the smartphone and semiconductor industries, to which Japan is a major supplier of equipment and component...