Japan 2013: Schroders

 Japan 2013: A year in Japan – Shogo Maeda, Head of Japanese Equities, Schroders

While the investment case for Japan is sometimes written off by investors as just being the ‘same old story’, we think these investors are missing an increasingly positive angle.

Market valuations remain extremely cheap and Japanese companies are in much better shape than global investors expect.

Global economic momentum is slow, which is a fundamental worry for investors in the Japanese market – externally the biggest influential factor remains US economic growth. Once Congress has reached an agreement and we know the impact of the ‘fiscal cliff’, major uncertainty will be removed from the US economy which should have trickle-down positive effects for Japan.

As Japan is China’s largest foreign supplier of goods, it has been adversely affected by the gradual decline in Chinese growth in 2012. However, 2013 looks brighter as signs of a cyclical recovery are coming through.