Japanese market's high correlation with FX rates not justified by fundamentals

Japanese companies are in a good position to deliver attractive returns to their shareholders in the years ahead, writes Reiko Mito, portfolio manager at GAM.

Our recent meetings with companies have underscored their new focus on corporate governance, the use of cash on their balance sheets, as well as an improvement on the return on equity. Boards are showing greater commitment to shareholder value than they have done in the past and firms are keen to be seen to be proactively implementing the government's new corporate governance code, which took effect in June 2015. The new code has encouraged companies to become more efficient with the use of cash and has also led to increased M&A activity. Are too many investors ignoring Japan? M...