It's no surprise some investors may harbour reservations about Japanese equities given their history for dire returns, but consultants and asset managers at a recent GP roundtable, sponsored by Nomura Asset Management, said the market is primed for a comeback and money has started to flow.
"One the things we are starting to see is that corporates are really having to get their act together. In many cases, in the tradable goods sector, they have to become more competitive just to survive," said Nomura Asset Management investment specialist Peter Jenkins.
"They certainly have to improve their returns to investors. We're seeing that throughout, and there is a great head of steam throughout Japan for companies to do that. Japan is an ageing society; they need their returns on equities. So there is a story there, but it's a corporate level story and it's actually quite an exciting story," he added.
Hewitt Associates senior asset allocation specialist Tapan Datta said some of the consultancy's larger clients are also showing interest.
"The backdrop has not been very enticing. We've talked about Japan's shaky returns. I think that would be an understatement," said Datta.
"That said...particularly from the perspective of some of our longer-term, more contrarian and more sophisticated investors, there is a sense that Japan could be a more interesting, turn-around story over the next few years, and on the whole, we would be inclined to agree."
Mercer principal Piers Bertlin took a more tempered view: "The long term story is that Japan has waxed and waned, but generally has waned. But this is a market where people will watch and see what the long-term holds."
"The interesting thing about Japan is it is out of sync with other markets, so when there are fears about the European position, for example, Japan will see something of a bounce," he added.
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