This Sunday's election is likely to see a decisive victory for Japan's Democratic Party of Japan (DPJ), ending 54 years of rule by the Liberal Democratic Party.
This "can only be a potential positive" for investors, as Christopher Wood of CLSA puts it.
Political stagnation has hitherto hampered economic reforms, while the DPJ has "good instincts on releasing pent-up consumer spending and addressing problems in the labour market", says the FT.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
But while hopes for political change are often dashed, the reasons why Japanese stocks look appealing over the long term have nothing to do with politics. Unlike its Western counterparts, Japan's economy has already been through a credit bubble collapse.
Meanwhile, the Topix remains the cheapest major market on 1.2 times book value, compared to pan-Europe's 1.5 and the S&P 500's 2.1.
-
Christmas at Chatsworth: review of The Cavendish Hotel at BaslowMoneyWeek Travel Matthew Partridge gets into the festive spirit at The Cavendish Hotel at Baslow and the Christmas market at Chatsworth
-
Tycoon Truong My Lan on death row over world’s biggest bank fraudProperty tycoon Truong My Lan has been found guilty of a corruption scandal that dwarfs Malaysia’s 1MDB fraud and Sam Bankman-Fried’s crypto scam
