Dan Carter on why he's shunning Japan's consumer proxies

Conundrum for investors

Japan's labour market continues to tighten. The country has one of the lowest unemployment rates globally, while surveys continue to indicate significant labour shortages.

As a result of this, we are increasingly asked about the conspicuous absence from our portfolio of those companies that look set to benefit most clearly from an improvement in Japanese consumption.  After all, a tight labour market must lead to higher wages and higher wages will feed through to higher consumption, right?  While wages are rising for workers in Japan, the speed of change is hardly more significant than it was before the Abenomics project began more than five years ago. Indeed, it would appear that, for the average Japanese worker, the benefit of becoming a year older...