Corporate Communication for professional investors only.

 

For many years, Japan has been seen as a stable but not very dynamic market.
Today, this scenario is changing.

After a long period of deflation and weak growth, the Japanese economy is entering a new phase, characterised by more stable inflation, rising wages and less exceptional economic policies. A change that also has tangible effects on financial markets.

 

Is Japan facing structural change?

Japan is moving away from the model that for years kept interest rates close to zero and prices stable.
Rising wages and prices indicate a more active economy, in which businesses and consumers are once again making investment and spending decisions.

The Japanese central bank (BOJ) has also begun normalising monetary policy, abandoning the extraordinary measures of the past. This signal reinforces the idea of a structural change, not a temporary one.

 

More dynamic markets

In recent years, the Japanese stock market has experienced significant growth, supported by rising corporate profits and a more favourable economic environment.

The bond market has also changed: yields have started to rise again after years of extremely low levels. This makes Japan a less “static” and more interesting market, but also more sensitive to economic and political developments.

It also makes it a less “static” market than in the past. With the end of policies that artificially kept rates and yields stable, markets are now reacting more directly to economic trends and political decisions. Against this background, the new institutional framework that has emerged following the electoral victory of Prime Minister Sanae Takaichi has also become a key focus for investors, as it could influence the country’s economic and fiscal policy decisions.

 

More efficient and value-oriented companies

One of the most significant changes concerns the behaviour of Japanese companies. In recent years, reforms have been introduced that have prompted companies to reassess how they use capital and manage growth.

In particular, companies have been encouraged to:

  • use capital more effectively;
  • improve profitability;
  • increase shareholder focus.

This process has fostered greater financial discipline and has led to several restructuring operations, such as the divestment of less profitable assets, share buyback programmes, and a more prudent management of available resources.

The result is a market made up of on average stronger, more transparent, and better-managed companies than in the past.

 

Opportunities and risks of investing in Japan

The new Japanese context offers interesting opportunities, but it is not without its complexities. The change in the economic and financial regime has indeed made the market more reactive and requires greater diligence in the evaluation of investments.

Among the key factors to monitor are:

  • interest rates trends
  • fiscal policy choices
  • yen trends

These factors may influence market conditions and investor expectations over time. For this reason, investing in Japan today requires a conscious and selective approach, capable of seizing the opportunities offered by the new scenario without underestimating its complexities.

 

Conclusions on the investment opportunity in Japan

Japan is undergoing profound change.
From a stagnant economy, it is now becoming a more dynamic market, with more efficient businesses and evolving economic policies.
This transition marks a break with the past and opens up new prospects for investors, in a context that rewards selectivity and a medium- to long-term vision.
Japan is therefore no longer just a defensive market, but a reality to be assessed with renewed attention within a diversified investment strategy.

 

 

 

Discover our funds in focus that invest in Japan

 

Eurizon Fund – Sustainable Japan Equity


The risk indicator assumes you keep the product for 5 years.

 

The summary risk indicator is a guide to the level of risk of this product compared to other products. It shows how likely it is that the product will lose money because of movements in the markets or because we are not able to pay you. We have classified this product as 4 out of 7, which is a medium risk class. This rates the potential losses from future performance at a medium level, and poor market conditions could impact the capacity of the Management Company to pay you. This fund does not offer any form of capital protection against future negative market conditions and, as a consequence, you may lose part or all of the amount originally invested. If the fund is unable to pay out what you are due, you may lose your entire investment.
Risks typically associated with ordinary market conditions include benchmark orientation, concentration, convertible bonds, currency, derivatives, equity, hedging, investment fund, management, market, sustainable investing.
Main costs: illustrative share class LU1543693680, class unit Z EUR Accumulation. - Entry charge: 0.00%. - Exit costs 0.00%. -  Ongoing costs: management fees and other administrative or operating costs 0.87% of the value of your investment per year. This is an estimate based on actual costs over the last year. Transaction costs 0.15% of the value of your investment per year. This is an estimate of the costs incurred when we buy and sell the underlying investments for the product. The actual amount will vary depending on how much we buy and sell. - Performance fees: 0.11%, the performance fee calculation is based on a comparison of the net asset value per unit against the High Water Mark where the High Water Mark is defined as the highest net asset value per unit recorded at the end of the five previous financial years, increased by the year-to-date return of the fund's benchmark. The actual amount will vary depending on how well your investment performs. The aggregated cost estimation above includes the average over the last 5 years.
This is not an exhaustive list of risks and costs. Other risks and costs apply, differ per unit class and are subject to change. All the risks and costs are detailed in the Prospectus and Key Information Document (KID). 
These documents can be viewed online by clicking here.


Eurizon Fund – Bond JPY LTE

The risk indicator assumes you keep the product for 4 years.

 

The summary risk indicator is a guide to the level of risk of this product compared to other products. It shows how likely it is that the product will lose money because of movements in the markets or because we are not able to pay you. We have classified this product as 3 out of 7, which is a medium-low risk class. This rates the potential losses from future performance at a mediumlow level, and poor market conditions are unlikely to impact the capacity of the Management Company to pay you.
This fund does not offer any form of capital protection against future negative market conditions and, as a consequence, you may lose part of or the entire amount originally invested. If the fund is not able to pay you out what is due, you may lose your entire investment.
Risks typically associated with ordinary market conditions include benchmark orientation, concentration, credit, currency, derivatives, hedging, interest rate, investment fund, management, market.
Main costs: illustrative share class LU0335989983, class unit Z EUR Accumulation. - Entry charge: 0.00%. - Exit costs 0.00%. - Ongoing costs: management fees and other administrative or operating costs 0.30% of the value of your investment per year. This is an estimate based on actual costs over the last year. Transaction costs 0.05% of the value of your investment per year. This is an estimate of the costs incurred when we buy and sell the underlying investments for the product. The actual amount will vary depending on how much we buy and sell. - Performance fees: There is no performance fee for this product. This is not an exhaustive list of risks and costs. Other risks and costs apply, differ per unit class and are subject to change. All the risks and costs are detailed in the Prospectus and Key Information Document (KID). 
These documents can be viewed online by clicking here.

 

 

 

This corporate communication is related to Eurizon Capital SGR S.p.A. and is not a marketing communication.