Factors such as persistent yen depreciation and short-term, stimulus-oriented fiscal measures have historically played a significant role in shaping valuations and investment styles in Japanese equities. However, signs are emerging that these structural premises are gradually changing.
“The market response to the Middle East crisis has been driven chiefly by concerns about inflation. This episode reaffirms our view that investors should remain diversified and maintain multiple layers of resilience and quality within portfolios.”
2026 was unlikely to be a year for broad market beta. The Middle East conflict and the AI-driven sell-off have now made that case impossible to ignore.