The January 2023 IMF World Economic Outlook update has reiterated, once again, the relative appeal of Japan compared with the other major developed economies. In particular, the IMF is forecasting faster 2023 economic growth for Japan. Central banks expect lower CPI, and, as a result, one may expect less pressure to raise interest rates. We have repeatedly emphasised how FJV adds value through its stock selection (and our last note, Opportunities from the mother of invention, highlighted how above-average innovation in Japan was an advantage to this), but a positive relative economic environment also provides following tailwinds, and helps investor sentiment.
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