In my view, Japan is the only major country that is going through a structural improvement in corporate governance, and, thus, deserves special attention by global investors.
The Japanese media are widely reporting that Governor Kuroda will be reappointed, which surprises very few people. Whether he wishes to finish his new five-year term is open to question, so the choice of Deputy Governor will likely be important.
John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com
With the Nikkei Index breaching the 24,000 mark, its highest level in 26 years, Japan appears to have put its “lost decade” of growth well behind it.
The implications of a surprising decline in non-manufacturers’ profit margin.
The Case for Abenomics and global reflation leading to a TOPIX level of 2500 in two years’ time.
Investing in Japan is not the same as investing in Japanese companies. Given the increase in their overseas exposure, we believe it is a good time to revisit opportunities in Japanese companies.
The release of the second quarter data on aggregate Japanese corporate profits confirms my twelve-year theme about improving corporate governance in Japan and how investors should not worry about the slow domestic economy.
We think Japanese companies are poised for a pickup in capital expenditure, led by productivity enhancing investments.
Our top Japanese Equity staff, including our CIO, report on how Corporate Governance remains on a strong upward trend, which should boost alpha for active managers and beta for the overall market via improvements in ROE and shareholder distributions.
The Global Investment Committee remains moderately optimistic about the global economy and equity markets, while being cautious on global bonds.