Australia’s top fund managers and superannuation giants recently attended a major Japanese investment conference, signalling growing interest in Japan’s surging equity markets. The Daiwa-Japan Exchange Group conference coincided with the Nikkei 225 index hitting a closing high of 44,372 points on Thursday, marking a 22 per cent gain over the past year and a 90 per cent rise over the past five years.
Corporate reforms introduced in 2015 are credited with fuelling this growth, pushing Japanese companies to prioritize shareholder returns through dividends and share buybacks. The conference in Sydney and Melbourne attracted key figures from hedge funds like Forager Funds, Caledonia, Regal Funds Management and Arnott Capital, along with investment teams from AustralianSuper, CBUS, and Rest Super. Delegates met with representatives from Japanese firms including Nintendo, Shiseido, and Mitsubishi UFJ, the country’s largest bank; Mitsubishi UFJ Financial Group (MUFG) is a Japanese financial services company headquartered in Tokyo. It offers a wide range of financial services.
Optimal Funds Management founder Warwick Johnson noted his portfolio is currently weighted towards long positions in Japanese companies. Senjin Capital co-founder James Halse highlighted the increasing Australian appetite for Japanese investments, driven by corporate reforms, a weak yen boosting profitability, and rising interest rates supporting banks and insurers. Senjin Capital is an activist boutique investment firm that counts family offices and wealthy individuals as clients.
Large institutions are increasing their allocations to Japan, with the University of Sydney’s endowment fund investing in a Japan-focused activist fund and superannuation funds like Australian Retirement Trust increasing their Japanese investments. The $250 billion Future Fund has been an early supporter, maintaining an overweight position in Japan for several years and adding Japanese activist fund Effissimo Capital Management to its developed market equities managers.
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AloJapan.com