Deep Dive: Reopening economy set to boost Japan opportunities

Shifting monetary policy

A reopening economy and potential monetary policy shift combine to make the Japanese equity market “one of the most attractive asset classes” for the new year, according to industry experts.

Tokyo's TOPIX index has generated a positive return for investors over the past year, according to data from FE fundinfo, but it also demonstrates the importance of currency hedging, as Nomura Asset Management CIO equity Yuichi Murao noted. "The yen's rapid depreciation has discouraged global investors from venturing into the Japanese equity market, which has nevertheless registered a positive one-year return in local currency terms (as of 30 Nov 2022), but also poor results in US dollar terms," he said. Head to Head: Japan's outlier monetary policy Despite the currency weakness, t...