We believe a combination of macroeconomic, geopolitical and regulatory tailwinds could bode well for Japanese equities in 2025 and sustain a broader-based rally than in recent years, especially among companies that generate the bulk of their revenues from the domestic economy.
While near-term risks remain, including volatile currency swings from monetary policy adjustments (which roiled equity markets back in August 2024), we believe near-term pullbacks can provide opportunities to invest in high-quality Japanese companies primed for long-term growth at attractive valuations.
For more details, see our new paper here.