“Japanese ownership of the stock market at household level isn’t that high, but I think prime minister Abe attaches quite a lot of importance to the feel-good factor generated by a rising stock market, and he’s been quite vocal in going round different global centres and saying, ‘Buy my Abenomics’, to fund managers. At the moment, he must be under some pressure because the markets had a rough start.”
How to remain relevant
According to Rose, the challenge for a Japan fund manager is remaining relevant because, compared with 10 or 15 years ago, the product offering at Schroders was nothing like as broad as it is now.
He says: “Our salesforce has a huge range of options and products, and asset categories they can sell, and keeping Japan relevant can be a challenge in the sense that just getting space on the shelf along with everything else that can be sold is not straightforward.
“Under Abenomics, Japan became relevant again; people were interested, which made life easier. I suddenly became very busy, with lots of meetings, and I hope it stays that way. But in the short term, it looks as if it is reversing slightly.
“People are getting less interested in Japan – less than they were, say, a year ago. That might change – the prime minister is still remarkably popular because of longevity. He has got no serious threats, so he may be there for a long time.
“There is an election this summer for the Upper House, which is Japan’s House of Lords, which Abe is probably going to do pretty well in. He can do two three-year periods as head of his party, which in effect gets him until the end of 2018.
“But that is a party rule, so who knows, they might change the rules. Currently, there is no real challenge in his own party, and no real challenge in other parties.”
Constitutional reform
By Japanese prime ministerial standards, Abe is young – youthful 60s, despite some publicised health issues this year. “If the will is to effect change, then Abe probably has the political capital to do it. I think his real goal is to reform the constitution – a pacifist constitution – which was imposed on his grandfather by the Americans after World War II.”
