Japanese equities, long regarded by global investors as a value market, are beginning to attract growth funds, as artificial intelligence-linked firms power to the top of market-cap rankings, beating out the manufacturers and telecoms giants that dominated for decades.
“We have been raising our exposure to Japan based on the growth prospects of Japanese companies” under a strategy of investing in innovative firms globally, said Kei Takizawa, senior investment strategist at AllianceBernstein Japan. The nation’s firms are playing an increasingly critical role in building AI infrastructure, he added.
Investors had historically classified Japan’s equities as low-growth value stocks due to the country’s sluggish economic growth and declining population. Global interest reemerged after 2023, driven by Warren Buffett expanding holdings of trading house shares as well as by corporate governance reforms. Yet the market’s appeal was still largely rooted in its cheapness.
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