Forget what you’ve heard about Japan
By International Adviser, 28 Aug 18
It’s not just another false dawn in the land of the rising sun, argues Rathbones’ Ed Smith
Click through the slides below to find out why
Investors have grown used to hearing that it’s “just another false dawn in the Land of the Rising Sun”.
So, Japan remains unloved and the only major market, excluding the Brexit-dogged FTSE 100, not to undergo a substantial increase in valuations (a ‘re-rating’ in market jargon) in the long-lived global bull market that continues to stampede ahead.
Since prime minister Shinzo Abe came to office in 2012, the average price relative to earnings (PE) of Japan’s Topix index has increased by just half of the rate enjoyed by European equities.
This despite earnings growing six times faster in Japan.
Chart 1: Japanese equity metrics vs US and Europe (source: Datastream, Rathbones)
Tags: Investment Strategy | Japan | Rathbones
