Is Japan finally turning the corner?

Japanese voters recently turfed out the party that has ruled the country since 1955, and replaced it with a party that has never governed before. Cris Solto Heaton explains what this means for Japan's economy, and why, although investors are right to be cautious, there are plenty of reasons to be optimistic.

Last week, more than 50 years of history was swept away in Japan's general election. The Liberal Democratic Party that has ruled the country almost uninterrupted since 1955, found itself out on the street, replaced by a party which has never governed before.

But despite the size of the shift, many still doubt whether the incoming Democratic Party of Japan will change anything. Japan has promised change so many times, the reasoning goes; disappointment has always followed. Why should it be any different this time?

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China (CSI 300)3,077+1.0%
Hong Kong (Hang Seng)20,319+1.1%
India (Sensex)15,689-1.5%
Indonesia (JCI)2,323-2.3%
Japan (Topix)936-3.5%
Malaysia (KLCI)1,179+0.4%
Philippines (PSEi)2,803-2.8%
Singapore (Straits Times)2,623-0.8%
South Korea (KOSPI)1,609+0.1%
Taiwan (Taiex)7,153+5.0%
Thailand (SET)668+1.7%
Vietnam (VN Index)528-1.5%
MSCI Asia101-1.0%
MSCI Asia ex-Japan431+1.3%
Cris Sholto Heaton

Cris Sholto Heaton is an investment analyst and writer who has been contributing to MoneyWeek since 2006 and was managing editor of the magazine between 2016 and 2018. He is especially interested in international investing, believing many investors still focus too much on their home markets and that it pays to take advantage of all the opportunities the world offers. He often writes about Asian equities, international income and global asset allocation.

Cris began his career in financial services consultancy at PwC and Lane Clark & Peacock, before an abrupt change of direction into oil, gas and energy at Petroleum Economist and Platts and subsequently into investment research and writing. In addition to his articles for MoneyWeek, he also works with a number of asset managers, consultancies and financial information providers.

He holds the Chartered Financial Analyst designation and the Investment Management Certificate, as well as degrees in finance and mathematics. He has also studied acting, film-making and photography, and strongly suspects that an awareness of what makes a compelling story is just as important for understanding markets as any amount of qualifications.