Japanese Anxieties Overstated


    Conventional wisdom says Japan’s economy continues to flounder. However, anxieties surrounding Japan may be overstated and costly, says Cambridge Associates. Other indicators such as corporate governance reforms, attractive valuations for Japanese equities, and healthy gains in areas such as employment and tourism point to opportunities for institutional investors, it says. “The reality is that many Japanese small- and mid-cap stocks are less exposed to factors like exchange rate swings and a volatile China and they can provide opportunities. And, despite limited economic growth, many of these companies continue to become more efficient, channeling profits and cash balances back to investors via dividends and buybacks,” says Wade O’Brien, managing director in global investment research at Cambridge Associates. Sectors in the Japanese economy worth looking at include retail, healthcare, tourism, and real estate which are somewhat buffered from regional and global macro-economics events, he says.