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It has been a difficult year for Japan. After some initial success managing the pandemic, its vaccine rollout has lagged and now the capital Tokyo is in its fourth state of emergency, just as the Olympics is due to start.
UK investors have largely neglected Japanese equities. Data from the Investment Association reveals investors hold £25.4billion in Japanese equity funds, including £1.3billion in Japanese Smaller Companies funds. This is equivalent to just 2.8 per cent of all equity funds from IA member firms.
While the Olympics may not provide a much-needed boost to the economy, the emergence of a new generation of companies may offer some compelling opportunities for investors.