Traditional Japan/Asia divide has no place in company analysis

ASIA

Investors in Asia have long accepted an anomaly: the absence of Japan.

While a Europe ex Germany or North America ex US index is a curiosity (except for German or US investors), Asia ex Japan is a global standard. A division between Japan and the rest of Asia has become part of a fund manager’s furniture. There were good reasons for this: Japan had a highly developed, technologically driven economy, while the rest of Asia was mired in political upheaval or post-colonial trauma. But things have changed. The biggest shift is the rise of China, which is poised to eclipse Japan as the world’s second-largest economy; on some measures it already has. China’s r...