Heartwood's Stanes: Why the yen's recent performance is unsustainable

Easy to become 'despondent' over Japan

It is easy for Japanese equity investors to become despondent. We have certainly witnessed some episodic rises and falls over the past 18 months, writes Michael Stanes, investment director at Heartwood Investment Management.

A lot of the narrative around Japan focuses on the macro shortcomings. The economy remains a source of perennial disappointment, but this view tends to ignore changes that are occurring at the 'micro' level. In particular, corporate Japan is now more focused on strengthening corporate governance and improving shareholder value. Furthermore, while large-cap exporters have been hurt by a strengthening yen, other sectors and stocks exposed to a 'new' Japan have told a very different story, especially among smaller companies. Fund managers keep faith with Japan despite 'failure' of negati...