Japanese IT discounts narrow as investors exploit share falls

Japanese investment trust discounts have drastically tightened, with investors confident the area's long-term growth prospects remain in place despite the earthquake's impact on share prices.

On the first full day of trading after the disaster, the average discount on Japan investment trusts widened sharply, moving to 14.7%. However, a week later discounts tightened to an average of 10.7%, according to data from Winterflood. The same happened in the Japan Smaller Companies sector, with discounts moving from 13% to 8%. Both David Mitchinson, who heads up the £70m J.P. Morgan Japan Smaller Companies trust, and Matthew Brett, co-manager of the £138m Baillie Gifford Japan trust, agreed the long-term fundamentals for Japan are still in place, with a number of sectors holding...