From Morningstar:

Investing in Japanese stocks has surged in 2023, with the Nikkei 225 index up 28%. Analysts believe this rally still has room to grow due to a healthier economy, reasonable earnings growth, and cheap valuations. Japanese equities are also among the cheapest in the developed world, with potential further gains for investors.

Japan’s economy is projected to grow 1.1% in 2023, compared to 0.5% for the Eurozone and 1.5% for the US. Rising prices have led to an increase in revenues, and the pre-tax profit margin has surged to record levels. The country currently trades at 14.4 times forward earnings and is expected to see earnings growth in the coming years.

Japanese companies have been increasing buybacks and dividends due to their net cash position. Additionally, the number of shareholder proposals is rising, and regulators and investors are holding companies more accountable for shareholder value. Individual investors are receiving encouragement to invest in equities. The yen is still cheap, which is beneficial for exporters and global investors.

Foreign investors have turned bullish on Japan, citing strong earnings and shareholder-friendly corporate reforms. The longer-term prospects for Japanese equities remain solid, as the country responds to more challenging geopolitics and significant inflation issues. There is a wide range of Japan funds and investment trusts available for those looking to invest in the country’s stocks.



Read more: 10 Reasons Why Japan Can Have a Great 2024