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A market long considered a value trap
By Hiromi ISHIHARA, Head of Equity Japan, Amundi Japan
For decades, Japanese equities were viewed by global investors as a value trap. Despite the country’s technological strength and industrial leadership, the equity market consistently traded at a valuation discount to its global peers. Low return on equity (ROE), excessive corporate cash balances and weak shareholder focus weighed on performance. Today, however, Japan appears to be at a structural turning point. A combination of corporate governance reforms, reflation and policy support is transforming the investment case for Japanese equities.
The origins of Japan’s valuation discount lie in corporate...
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