Throughout recent history, Japan has endured its fair share of financial crises and shown itself to be prone to natural disasters and, indeed, epidemics.
These are just two examples of a picture that is revealing itself across almost every sector.
While it is not without its short-term issues, corporate Japan is showing some resilience in the face of the pandemic and should appeal to income-starved investors in a big way.
Especially given the likelihood that Western firms will likely hesitate before reinstating dividends at pre-Covid 19 levels when the time comes.
Shinzo Abe's legacy policies will long outlive him and markets have been buoyed by Yoshihide Suga commitment to the strong foundations already laid: the Stewardship Code, the Corporate Governance Code, the rebalancing of the GPIF to encourage its appointed fund managers to focus on 'proper' investment parameters (notably ROE), and the overhauling of duty free and visa rules which launched a tourist boom in Japan, are policies that should survive over the longer term.
Even with the cyclical downturn created by the Covid-19 pandemic, we believe the structural changes which have supported the steady underlying improvement in RoE in recent years are continuing.
The proposed buyout of NTT DoCoMo (Japan's largest listed subsidiary) by parent company Nippon Telegraph and Telephone, Sony's completed purchase of Sony Financial creating a fully owned subsidiary Showa Denko's offer to acquire Hitachi Chemical from Hitachi Ltd and the merger of Hitachi Capital and Mitsubishi UFGJ Lease are recent examples of significant corporate ownership - all underpinned by the objective of improving capital efficiency and business prospects (there are over 600 companies listed on TOPIX that have a controlling listed shareholder - about 17% of the market).
With a further review of the Corporate Governance Code scheduled for the spring 2021 and the restructuring of the Tokyo Stock Exchange primary indices expected in April 2022, the external pressures look set to continue.
Richard Aston is portfolio manager of the CC Japan Income & Growth trust