Japan Funds Best Performing Trusts Over 3 Years

Japan has proved a savvy investment for closed-end fund shareholders over the past three years. And now the economy has started to pick up too

Karen Kwok 2 March, 2017 | 1:52PM

Japan’s economy may not be doing as well as expected – but that is actually good news for investors. Much like a weak pound has proved positive for the FTSE 100, a weak yen boosts the Japanese stock market. Japan’s economy grew at rate of 1% in the final three months of 2016, down from 1.4% in the previous quarter, and lower than expectations. But currency weakness stimulated growth in exports and business investment, the government revealed.

A weaker yen makes Japanese goods more attractive to overseas buyers and improves repatriated earnings. Exports rose 2.6% in the fourth quarter, compared with a 2.1% increase in the previous quarter, as the US dollar rose against the yen following the victory of Donald Trump in the US presidential election in November.

“Japan’s most important export market is the US, where ongoing wage increases, employment growth and higher consumer confidence should help to drive the current momentum in export demand,” said Naoki Kamiyama, chief strategist with Nikko Asset Management. 

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Baillie Gifford Japan Ord994.25 GBP-1.56
Baillie Gifford Shin Nippon Ord257.02 GBP-0.77
Fidelity Japan Trust Ord221.04 GBP-1.32
JPMorgan Japan Smaller Cos Ord520.31 GBP-2.38
JPMorgan Japanese Ord706.00 GBP0.00
Schroder Japan Growth Ord184.08 GBP-2.08
Witan Pacific Ord500.19 GBP-1.92

About Author

Karen Kwok

Karen Kwok  is a Reporter for Morningstar.co.uk

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