Japan’s economy is in the midst of a structural transformation that Columbia Threadneedle Investments calls one of today’s most compelling opportunities. After decades of stagnation, growth is now driven by domestic demand, supported by rising wages, household consumption, and corporate reinvestment. This shift marks more than a cyclical rebound—it reflects the emergence of a self-sustaining expansion.
At the heart of the change is the corporate governance reform. “After decades of inefficient capital allocation, Japanese companies are now systematically unlocking shareholder value through concrete actions,” says Daisuke Nomoto, Global Head of Japanese Equities at Columbia Threadneedle.
A major driver is balance sheet optimisation. Analysts forecast that Japanese firms could lift return on equity from 8.5% to 11% over the next three years by deploying underutilised assets. “For investors, this represents more than a cyclical improvement; it marks a fundamental shift in how corporate Japan delivers value to shareholders,” Nomoto opines.
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