Japan’s medium-sized stocks provide shelter from trade wars

Nicholas Price, portfolio manager of Fidelity Japan Trust, tells us where to invest in Japan

Fukuoka, Japan Skyline
(Image credit: Getty Images)

Global markets reacted immediately to Donald Trump’s election victory. Japan was no exception, with key indices enjoying a lift. While the initial impact will fade quickly, concerns over the pursuit of protectionist trade policies are set to linger. It is necessary to judge carefully how policies announced at the time of the election are actually implemented; how might they affect individual companies?

In this environment, mid-caps focused on the domestic economy – which are generally well insulated from external macro factors and beneficiaries of reshoring – represent attractive opportunities. Meanwhile, Japan-specific developments, such as reflation and corporate-governance reforms, are multiyear structural factors creating new investment ideas.

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Nicholas Price, Fidelity Japanese Values