Our current view on Japan comprises three main bearish elements, and three bullish ones. We will turn first to the bearish considerations.
As ever, looking at Japan from a Bull/ Bear point of view proves to be a challenge.
Alongside the rest of the world, Japan is facing some trying headwinds in the face of the coronavirus.
Country 'doing the opposite' from rest of the world
Steady progress in growing per capita income
Why are investors just not that into Japan?
Value 'no longer the outstanding investment story'
In an environment where no region presents an obvious opportunity from a valuation perspective in 2019, Japan offers investors the best chance to at least get access to a major market at something of a discount.
Governance reforms set to yield positive long-term returns
Maintaining overweight position to the region
Japanese stocks have more than doubled their returns since December 2012, on the back of Abenomics, but many investors are still not convinced of the sustainability of the rally.
Attractive dividend yields
The Japanese stockmarket offers opportunities for investing in growth companies that are benefiting from structural changes in business or consumption patterns, or from demographic patterns such as the ageing, declining population.
The Japanese equity market will resume its ascent, buoyed by favourable political conditions, strong and evolving corporate reforms and continued monetary easing by the Bank of Japan (BoJ).
Improving prospects in Japan
Shinzo Abe's landslide victory in last year's presidential election leaves him in an unprecedented position of power and likely to become the longest-serving Japanese premier ever.
How important are shareholders to a business? Normally, very important.
Everyone likes low prices, but if I said to you the level of Japanese consumer prices are now at the same level as way back in October 1998, then correctly you would conclude something is not quite right.
Hope amid trade war and Brexit concerns
Contagion risk with US and China trade war
Stronger yen will translate into larger current account surplus
We believe Japan is slowly emerging from its long period of deflation.
Japanese GDP is likely to expand an average 1.7% through March 2019. Growth should be about 1.6% in April through December this year, rising to 1.8% next January through March.