An assessment of the investment opportunities resulting from a debilitating combination of successive recessions in Japan and the reluctance of government officials to enact and enforce financial sector reforms. Key topics include market risks, supply of distressed assets, strategies to capitalize on the opportunity, and investment vehicles and fund structures.
The failure of conventional fiscal stimulus, the growing evidence of widespread deflation, and the impending crisis posed by mounting government debt all indicate that the authorities must attempt to reflate the economy by any means possible, including currency depreciation. However, the efficacy of yen depreciation is far from certain, as its impact on consumer prices…
Despite faint stirrings of reform in Japan, the macro environment remains inhospitable for equity investors, appealing only to dyed-in-the-wool contrarians. Two developments seem inevitable: rising inflation and a weaker yen.