Chelsea managing director Darius McDermott pointed out that Japan remains the “least loved” developed market by UK investors after the country’s numerous false dawns prevented sustained success being seen in the market.
However, he predicted that this could change if the centre-right LDP party is elected into power on 16 December and Shinzo Abe is reappointed as the country’s prime minister.
Abe, who is expected to win the race in a landslide victory, intends to push the Bank of Japan to start unlimited open-ended quantitative easing and use fiscal stimulus and a public works programme to reignite the economy.
His suggestions would weaken the yen, which would improve the competitiveness of Japanese companies and, as several commentators have argued, could cause the country’s stock market to soar.
McDermott said: “[Japan] did little to help its cause this year being the only market to be in negative territory but if the election goes as expected this week, the policies introduced should be pretty market-friendly going into the new year.
“The yen has also weakened recently and if this remains the case, foreign investors should start to address their underweight positions in the asset class, which would further boost markets.”
He added that Scott McGlashan and Ruth Nash’s £191.6m JOHCM Japan Fund and Simon Somerville and Dan Carter’s £450 m Jupiter Japan Income Funds are his preferred portfolios for investing in the country.
