TwinFocus Insights

The Case for Japanese Equities - Revisited The Case for Japanese Equities - Revisited

In November 2025, we outlined the case for an investment in Japanese… In November 2025, we outlined the case for an investment in Japanese equities, arguing that Japan had evolved from a value trap to a more compelling long-term equity opportunity supported by improvements in company fundamentals, policy initiatives, and structural corporate governance reforms. Despite progress, return on equity and asset turnover remained well below developed market peers, suggesting the reform cycle was still in its early stages and fundamentals had room to improve further. In addition, though Japanese equities had outperformed the S&P 500 through Q3 2025, they lagged Europe and EM markets. Still, valuations remained attractive relative to global equity markets. We concluded that for long-term investors there was a case for a dedicated Japanese equity allocation as part of a fully invested, globally diversified portfolio. This note revisits that conclusion. The fundamental reform and valuation story remains in place.... Read More