Asian markets rally as Japan’s policy shift reshapes investor sentiment

Fidelity

In Tokyo, investors have found fresh conviction in the political outcome that now shapes Japan’s near-term direction. The Nikkei 225 vaulted to an all-time high as markets digested Sanae Takaichi’s leadership victory, an event interpreted as the beginning of a more assertive fiscal era.

Export-heavy names, particularly within industrials, machinery, and technology, surged as the yen weakened sharply against the dollar. A softer currency signals that rate hikes are unlikely in the near term. Domestic cyclicals joined the rally on expectations of stronger internal demand once fiscal measures begin to filter through the economy.

Long-dated Japanese government bond yields rose on speculation of increased issuance to finance broader spending, while shorter-term yields slipped as markets priced out early policy tightening.

Equities in South Korea, Taiwan, and Hong Kong advanced as investors read Japan’s stance as a regional signal that policy momentum could remain supportive of growth.

Fidelity Asian Values Plc (LON:FAS) provides shareholders with a differentiated equity exposure to Asian Markets. Asia is the world’s fastest-growing economic region and the trust looks to capitalise on this by finding good businesses, run by good people and buying them at a good price.

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In-demand Asian small-cap value stocks drive Fidelity Asian Values NAV up 16.2%

Fidelity Asian Values reported strong performance in its August 2025 monthly factsheet. The Trust’s NAV rose 16.2% over the 12 months to 31 August 2025, ahead of its reference index which gained 7.8%, while the share price increased 20.4% over the same period.

Fidelity Asian Values reports 17% share price rise over 12 months 

The Trust’s NAV rose 12.4% over the 12 months to 31 July 2025, ahead of the index at 7.1%, with the share price up 17.0%. Stock selection was the key driver of relative performance, with holdings in China and Hong Kong adding value, while overweight exposure to Indonesia detracted.

Fidelity favours investing in Chinese small and mid-cap companies (LON:FAS)

Fidelity Asian Values Investment Director Himalee Bahl highlights the Trust’s disciplined value-focused approach amid market uncertainty. By targeting undervalued small and mid-cap companies across China, Indonesia, and South Korea, the Trust avoids momentum-driven areas such as AI-related stocks in Taiwan and expensive Indian small caps.

Fidelity Asian Values significantly outperforms its index over 1 year (LON:FAS)

Over the 12 months to 30 June 2025, the Trust’s NAV rose 4.9%, outperforming its reference index which fell 0.1%, while the share price gained 6.9%. Stock selection was the key driver, with contrarian positions in China and Australia and picks in materials and consumer staples adding value, though an overweight in Indonesian small caps detracted.

Fidelity Asian Values gains on significant China exposure (LON: FAS)

The Trust’s NAV rose by 1.8% for the 12 months to 31 May 2025, outperforming its reference index, which declined 0.6%. Strong stock selection, particularly in China, materials, and technology, contributed to gains, while overweight positions in Indonesian small caps detracted.

Fidelity Asian Values outperforms with contrarian small-cap strategy

Discover how Fidelity Asian Values plc (LON:FAS) leverages a contrarian approach to invest in smaller Asian companies, driving substantial returns and outperforming benchmarks.

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