2026 Market View: Japan Equity

Dec 04, 2025

Maya Funaki, Portfolio Manager, summarises the market in 2025 for the asset class, and gives her thoughts for 2026.

  • Japan equities surged in 2025, with the MSCI Japan Index surpassing 1989 highs, driven by corporate governance reforms, improving fundamentals, reasonable valuations, and consistent EPS growth.
  • Political shifts saw Japan’s first female Prime Minister, who’s pro-growth, pro-investment stance was received positively by the market, though navigating high inflation will be a focus in 2026.
  • Geopolitical tensions with China are viewed as short-lived, counterbalanced by strengthened US ties driving renewal in several industries such as defence and shipbuilding.
  • Global investors are so far underexposed to the world's third largest economy, and we see strong momentum ahead as investor sentiment continues to intensify for Japan.


Watch all our 2026 Market Views

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