“Japan is back”, Japan is once again attracting the biggest investors on the planet at a time when China is experiencing an unprecedented real estate and confidence crisis. The Tokyo stock market is at its highest level in decades. Foreign investors want to believe in Japan’s ability to shock its economy to make it more productive
Foreign investors are taking their capital out of China and placing it in Japan. Since September 2020, we learned at the last Citic-CLSA bank forum in Tokyo, they have invested more than 110 billion dollars in the Japanese stock market. There have never been so many people participating in the latest Citic-CLSA bank forum in Tokyo. According to Nicholas Smith, the bank’s strategist, money in Japan remains free or almost free. Companies are hyper competitive in terms of cost. They absorb wage increases without cutting into their profit margins. Mergers and acquisitions are on the rise. The net profits of many companies are driven by their growth. Not by the weak yen (it has lost more than 30% of its value since 2021) which boosts for other sectors, such as automobiles, the value of profits made in dollars or euros.
Geopolitical tensions benefit Japan
Japan will be the beneficiary of the Second Cold War in Asia, analysts suggest at the Citic-CLSA forum. Japan is catching up in semiconductors by inviting TSMC and other leading Taiwanese companies to set up ultra-modern foundries. Large Japanese groups cooperate with Samsung and other South Korean giants in artificial intelligence platforms. Japanese banks, like Nomura, invest in companies in the Asia-Pacific region. Japan is democratic, stable and placed under the American nuclear umbrella for its security.
No choice but to reinvent yourself
Japan is penalized by the fall of the yen, the stagnation of wages, the weakness of its economy, the decrease in its population, its hesitation to open up to immigration and yet it succeeds in reinventing itself. It must be said that he has no other choice. It must create new sources of growth to finance its aging, a public debt that represents two and a half times the size of its economy. Opening up to immigration is your last chance.
Japan has the most abundant savings in the world. It remains the leading investor abroad. But he needs to change his mindset. Warren Buffett, the famous investor, sees the future in Japan. Last year, at the age of 92, he traveled to Tokyo after investing billions of dollars in the five largest Japanese business houses. Century-old companies. “ They represent not only Japan, but also the whole world “, did he declare.
