Morgan Creek Capital Management examines why Japan may be entering a durable investment renaissance after decades of stagnation. The presentation argues that Abenomics, improving corporate profitability, and historically inexpensive valuations could reshape investor perceptions, while challenging the widely held belief that Japan’s best years are permanently behind it.
Japan: This Time For The Money
Morgan Creek Capital Management
Research
33 Pages
Key Takeaways
Compelling Valuations: Japanese equities traded at significantly lower valuations than global peers, while GMO projected negative real returns for many traditional assets through 2020, making Japan comparatively attractive.
Profit Growth Potential: With the yen returning toward 110, Toyota's profits were estimated to rise 70%, while policy reforms aimed to lift corporate profitability and return on equity.
Policy Driven Shift: After nearly 20 years of "noflation," the Bank of Japan adopted a 2% inflation target, supporting the case for renewed earnings growth and higher equity valuations.
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