The often-cited investment adage that stocks go up in the long run seems to apply just about everywhere except Japan. The Nikkei index is still below its peak in 1989, and many of the attempted reforms, ranging from monetary, fiscal, and governance, have fallen short and disappointed equity investors. Perhaps these factors contributed to the creation of yokocho drinking alleys, helping investors drown their sorrows (a must-visit for any trip to Tokyo). Despite all this, we have recently become increasingly positive on this subcategory of global equities.

In this week’s Ethos, we consider Japan’s currency potential, loosening restrictions, economic conditions, and improving valuations.

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