Navigating the 'significant valuation dislocation' in Japanese equities

Faced with ongoing uncertainty and volatility, global macroeconomic commentators are in two distinct camps: one that observes symptoms of recession and another that observes signs of a global recovery.

We observe the market has already priced in the shorter-term cyclical symptoms of recession for a wide range of Japanese companies.  Does Japan needs to implement excess cash levy? Corporate Japan is not immune from the global macroeconomic cycle, as observed by downward earnings revisions in recent months. However, the market's shorter-term cyclical risk perceptions ignore the structural changes leading to rising longer-term trend returns and the potential unlocking of value in Japan.  Extreme investor behaviour has also driven a standout valuation exception in Japan. Uncertain...