Japan - A Trade of The Decade?

Japan has been making some headlines as one of the contrarian trades of choice for some time. This weekend was nothing new therefore, when James Ferguson in The Times decided to tip Japan to outperform based upon. The argument is simple, the Nikkei averages a price-to-book of half that of the FTSE shares and therefore below the actual book value.

Japan has made a mug out of plenty of people, and if you keep trying to put forward a case for Japan then you may eventually get it right. From my own perspective, I like the fact that it is not overly expensive and has some great companies. Whilst I am not saying that Japan can't and will not become cheaper, it has led me to add a significant proportion of my asset allocation into the Invesco Perpetual Japan fund. Time will tell if it was a trade of the decade, or just another false dawn in the land of the rising sun.