Investor Presentation: Japan Summer School: Japan Equity Strategy: Structural Tailwinds and Investment Themes Behind Japan’s Secular Bull Market

研报英文原文证据摘录

Investor Presentation: Japan Summer School: Japan Equity Strategy: Structural Tailwinds and Investment Themes Behind Japan’s Secular Bull Market

FoundationM

4 reasons we are bullish on Japan equities

Structural drivers underpinning the long-term Japan equity bull market we have long argued for are

strengthening further

Sustained, stable inflation Expectation of long Takaichi Progress in corporate Rising household Japan equity

tenure / faster growth strategy governance reform investment via NISA

incl. national security

Japan is shifting to a phase where The LDP led by PM Takaichi won 316 After reforms triggered by the TSE With sustained, stable inflation,

inflation moves toward the 2% target Lower House seats, a landslide with market restructuring in Apr 2022, balance-sheet management is being

as the output gap gradually narrows. a solo >2/3 supermajority. Prime market PBR is up c.40%. In reassessed not only by corporates

This shift opens a path to sustainable Via (1) higher policy predictability, (2) 2026, we expect a CG Code revision but also households. NISA supports

growth, wage gains, more flexible faster decision-making, and (3) (around Jun) is to push better use of this trend. From Jan 2027, a "Kids

pricing, stronger capex, and higher higher execution certainty of growth corporate cash. Faster reform should NISA" is planned, allowing under-18s

productivity. strategy, this is likely positive for lift ROE and support Japan equities to invest up to JPY 600k/year. (JPY

both mid-term earnings outlook and via PBR/PER expansion. 6mn total) tax-free via tsumitate.

the risk premium demanded by

capital markets.

Source: Morgan Stanley Research

Morgan Stanley MUFG 3