Japan Update 2026: Dalton Investments
FILMED IN AUGUST 2026
In this latest video, Jamie Rosenwald explores the compelling opportunities he sees in the Japanese market, from rising corporate earnings and governance reforms to attractive valuations and increasing M&A activity. He also explains why a weaker yen could continue to benefit Japanese exporters and investors alike.
Watch now to discover why Japan remains one of Dalton's highest-conviction investment opportunities.
Transcript
So at Dalton we’re extremely optimistic about the future of the Japanese market. In 2026 we have seen Japanese corporate earnings rise. We have seen margins expand among corporations. We have seen increased share buybacks and dividends. And we've seen improvements in corporate governance reform which benefits all shareholders.
These factors, combined with the fact that Japan, on most economic metrics, trades at significant discount to the US and European markets provides us with tremendous optimism about the future of the Japanese market.
At Dalton we really can't predict where the dollar/yen or dollar/euro or yen/pound, for instance, will be a year from now. But we do know that the central Bank of Japan has tried its best to keep the yen weaker for longer interest rates lower for longer for longer than most other major currencies globally. This provides a unique opportunity for those who travel to Japan, and we strongly recommend all of you do so for the period of time that the yen remains so weak. This also provides tremendous benefit to Japanese corporations who export their goods abroad.
Japan has gone through significant corporate governance reforms over the last ten years, and the most recent reforms continue to focus on merger and acquisition activity. These are being driven by private equity investors and corporations that are buying their competitors in the market. We feel that the definitions that the government has recently put out provide continued tailwinds for those buyers. Therefore, Dalton focuses on companies which will benefit significantly from these reforms, and we hope over time that they will play out to the benefit of all shareholders.
Dalton doesn’t like to turn over its portfolios very often because turning over portfolios leads to the brokers making money not you making money. Nonetheless, there were a couple of AI names that rose so dramatically over such a short period of time that we did trim them and utilise the money to reinvest in consumer products companies and manufacturers, where we believe the valuations are extremely low.
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