Topix 150

There is no doubt companies' sales and earnings are being hit across Japan.

Japanese stocks have lagged their global peers so far this year, as uncertainty over US-China trade frictions and the impact on the global economy have clouded the outlook for corporate earnings.

The Japanese equity market has seen net outflows in the past 12 months, with concerns over global growth and the trade war weighing on investor sentiment in the region.

Faced with ongoing uncertainty and volatility, global macroeconomic commentators are in two distinct camps: one that observes symptoms of recession and another that observes signs of a global recovery.

Japanese equities have been routinely shunned by global allocators for decades.

Last year was challenging for Japanese equities.

Attractive dividend yields

The Japanese stockmarket offers opportunities for investing in growth companies that are benefiting from structural changes in business or consumption patterns, or from demographic patterns such as the ageing, declining population.

We are excited and bullish about the opportunity set in Japan both from an equity and multi-asset, risk-adjusted perspective.

When it comes to the Japanese market currently, cash is in abundance, valuation metrics are not stretched and corporates have the capacity to increase returns to shareholders.