Japan's Economic Dawn: Yields, Demographics, and Corporate Governance

Corporate Governance Reform

The Tokyo Stock Exchange’s mandate for companies trading below book value to “fix it or delist” has unleashed a wave of:

1. Share Buybacks: Returning cash to shareholders.
2. Unwinding Cross-Shareholdings: Breaking up the keiretsu webs that stifled innovation.

The Demographic Dividend?

Surprisingly, Japan’s labor shortage is driving automation and wage growth, finally pushing inflation into a healthy 2-3% target band.

• Automation Leaders: Japan’s robotics sector is uniquely positioned to solve not just local, but global labor shortages.

Thesis: We view Japan not as a value trap, but as a restructuring play. We are long banking sectors that benefit from positive interest rate spreads for the first time in decades.