Extreme valuations, SPACs, meme stocks and Tesla have dominated the financial press recently. On the contrary, Japan has been largely ignored.
Where in certain parts of global markets there are worries about bubbles, there are no such concerns re Japanese equities. The Japanese market has been left behind in the Covid recovery and whilst technical factors have driven the market this year, fundamentals remain strong.
With the emergence of new Covid treatment pills from Pfizer and Merck, and a rapid pick up in vaccination rates, we are hopeful that the regular 'States of Emergency' that have plagued Japan's economic recovery are now in the rear view mirror.
Given a cheap market, a new government with a larger than anticipated majority, several fundamental drivers and significant catch up potential, we have built up an overweight position in Japanese equities which this report will delve into in greater depth, we hope you find it of interest.