Fidelity Japan Trust PLC (LON:FJV) published its monthly factsheet for the period ended October 2024.
Portfolio Manager Commentary
Japanese equities remained volatile in October, reflecting Japan / US political developments and geopolitical risks, though key indices registered their first positive returns in four months. Stronger-than-expected US jobs and CPI data drove gains in Treasury yields, leading to a weakening of the yen. The ruling Liberal Democratic Party-Komeito coalition failed to secure a majority of seats in the Lower House elections. However, the result was largely priced in, and stocks subsequently gained on expectations that cooperation with opposition parties would lead to stimulative economic policies. Meanwhile, the Bank of Japan kept the monetary policy unchanged and reiterated its view that the forward risk to prices is skewed to the upside.
Following the results of the US election, long-term rates gained as expectations for further rate cuts by the Fed waned, leading to a weakening of the yen. These conditions are generally positive for Japanese stocks. With Prime Minister Ishiba reappointed as Japan’s leader, the immediate policy focus will be on expansionary fiscal measures. Despite the elevated levels of political uncertainty, positive structural trends such as a burgeoning cycle of rising wages and prices, progress in governance reforms and a nascent shift in household and corporate assets are supportive of the Japanese equity market.
Over the 12 months to 31 October 2024, the Trust recorded NAV and share price returns of 5.7% and -1.3% respectively, compared to 14.9% for the index.
Fidelity Japan Trust PLC (LON:FJV) aims to be the key investment of choice for those seeking Japanese companies exposure. The Trust has a ‘growth at reasonable price’ (GARP) investment style and approach – which involves identifying companies whose growth prospects are being under-appreciated or are not fully recognised by other investors.
