Articles

If the macro and governance case for Japanese equities has convinced you — or even just made you curious — the next question is practical: how do you actually buy Japanese stocks from outside Japan? The good news is that access has never been easier. The less good news is that the method you choose matters more than you might think, because it affects your costs, your universe of investable stocks, your currency exposure, and your tax obligations. This guide walks through the main options from simplest to most direct. ...

Between 1995 and 2021, Japan’s average annual inflation rate was approximately 0.2%. For an entire generation, prices were essentially flat or falling. This was not a neutral condition. Deflation corroded the economy from the inside, suppressing wages, discouraging investment, rewarding cash hoarding, and keeping equity valuations perpetually depressed. That era is over. As of December 2025, Japan’s core consumer price index — excluding fresh food but including energy — had remained above the Bank of Japan’s 2% target for 45 consecutive months. The headline CPI averaged 3.2% for calendar year 2025, according to Japan’s Statistics Bureau. Even the “core-core” measure excluding both food and energy — the closest proxy for domestically generated inflation — has been running above 2% for over three years. ...

If there is one thing that separates the current Japanese equity rally from previous false dawns, it is the corporate governance revolution. This is not a government talking point or a consultant’s slide deck. It is a measurable, accelerating change in how Japanese companies allocate capital, return cash to shareholders, and engage with investors. For overseas investors evaluating the Japan opportunity, understanding this reform is essential. It explains why buybacks are hitting records, why cross-shareholdings are being unwound, and why the valuation gap with the rest of the world is likely to narrow. ...

For over a decade, the default recommendation for retail investors worldwide has been simple: buy a global index fund and forget about it. The MSCI All Country World Index — or its close cousin, the S&P 500 — became the intellectual path of least resistance. And for a long time, it worked beautifully. But the conditions that powered that trade are shifting. After three decades in Japan’s institutional investment industry, I believe we are entering a period where Japanese equities will meaningfully outperform global indices. This is not a short-term tactical call. It is a structural argument built on five mutually reinforcing pillars. ...