Neptune's Taylor: Why Japan is a classic 'special situation'

ON JAPAN

Japan can best be summed up as a classic ‘special situation', whereby investing in Japan is all about investing in companies and not the country. The two have very different prospects.

Essentially, investors do not appreciate the underlying fundamental and positive corporate changes that have occurred across Japan’s industrial and commercial base which make selective investment in Japanese stocks attractive. They are still deterred by the market’s poor historic performance, the assumed negatives of an overvalued currency and the country’s ongoing structural problems. The structural problems, worsened further by the tsunami, earthquake and nuclear plant triple disasters, are combined with little political will to tackle the problems. By contrast, the Japanese cor...