Is Japan the best market to invest in now?

Japan puts Western economies to shame and offers good value for both equity and bond investors, says Max King.

japan
(Image credit: © Getty Images)

When, in 2011, I last came to Japan, the Nikkei 225 index was at the bottom of a long bear market, having fallen by 75% in 22 years. Periodic rallies had not been sustained as, it was commonly agreed, most Japanese companies were not run for profit. Protected from shareholders and predators by cross-holdings, boards focused on themselves and staff loyalty.

Government bonds yielded just 1.25%, the lowest in the world, which seemed absurdly overvalued given Japan’s high government debt relative to the size of the economy. Many had sold bonds short in the expectation of higher yields but this trade became known as “the widowmaker” as it had persistently failed.

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Max King
Investment Writer

Max has an Economics degree from the University of Cambridge and is a chartered accountant. He worked at Investec Asset Management for 12 years, managing multi-asset funds investing in internally and externally managed funds, including investment trusts. This included a fund of investment trusts which grew to £120m+. Max has managed ten investment trusts (winning many awards) and sat on the boards of three trusts – two directorships are still active.

After 39 years in financial services, including 30 as a professional fund manager, Max took semi-retirement in 2017. Max has been a MoneyWeek columnist since 2016 writing about investment funds and more generally on markets online, plus occasional opinion pieces. He also writes for the Investment Trust Handbook each year and has contributed to The Daily Telegraph and other publications. See here for details of current investments held by Max.