This latest FundCalibre podcast episode focuses on Japan’s changing market dynamics and why investor sentiment appears to be shifting after decades of stagnation. Richard Kaye, manager of the Comgest Growth Japan fund, discusses the return of domestic confidence, renewed consumer and corporate activity, and the growing role of institutional capital in supporting equities.
Also explored is Japan’s position within global technology and AI supply chains, highlighting its continued leadership in semiconductors, robotics, and industrial automation.
Finally, a look at broader structural themes, including demographic change, labour market reform, and Japan’s integration into wider Asian growth. Together, these forces are reshaping the long-term opportunity set for investors in Japan.
Why you should listen to the interview: An on-the-ground perspective from Japan, unpacking why sentiment is improving after decades of pessimism. The interview explores how structural change, technology leadership, and returning domestic capital are reshaping the market.
This interview was recorded on 23 June 2026. Please note, answers are edited and condensed for clarity. To gain a fuller understanding and clearer context, please listen to the full interview.
Interview highlights:
Japan’s turning point
“Being in Japan is extremely important right now, because there’s quite an important sentiment change going on in this country. I feel it very much just talking to people on the ground – taxi drivers, restaurant owners – and we see it in the stock market’s performance.
“This is a country that’s been through 30 years of stock market decline, where everyone said it was ex-growth. But the last year or so has challenged that perception.
“There’s a sentiment change as people are starting to believe in themselves. I’m not saying the stock market defines everything, but it’s an important indicator of sentiment. When the Nikkei goes to new highs, you see it reflected in the news, and you feel it on the ground.”
Structural energy resilience
“Of course, the Houthi crisis has been big for Japan. Japan is a country that imports most of its resources. It’s the biggest economy with almost no natural resources.
“But Japan has dealt with it. It has a vast solar and hydroelectric base, has been switching its nuclear stations back on, and has built strong LNG relationships with Australia, which now supplies around 40% of its natural gas.
“Oil is actually the smallest energy source for Japan now. They still need it for transport, but beyond that they’ve diversified impressively. They haven’t been crippled in the way other Asian economies have, and in some cases have even adapted further by increasing US oil procurement.”
The return of growth investing
“There has been a style change back to what I think is the market’s natural mindset, which is growth investing. Japan is a nation of innovators and survivors.
“It has become one of the largest economies in the world despite having almost no resources.
“We had a few years where value dominated, and people extrapolated that forward. But I think that interpretation is wrong. Growth is the natural character of the Japanese market, and I think we are going back to that.
“The rapid depreciation of the yen was a major factor behind the value environment, and as that abates, we’re seeing a return to growth companies.”
Japan’s role in the AI chain
“We are quite linked to the global AI trade. The people building data centres in America or China buy from Japan — equipment, materials, software. Many of those companies are in our portfolio.
“For example, semiconductor manufacturing relies heavily on Japanese firms. All of the world’s chips used in data centres are packaged with thermal-resistant materials made by Japanese companies, often by just a handful of suppliers.
“They are indispensable. That entire ecosystem is very important for Japanese technology, and we have benefited from it.”
Why Japan today for investors
“The S&P has actually lagged the Japanese market for at least two years now. People still assume the US is the greatest place to invest, but that hasn’t always been true recently.
Within Japan, carefully selected leaders can outperform broader indices and global benchmarks. And importantly, domestic institutional investors – Japan Post Bank, Nippon Life, and others – are returning to their own market.
These are some of the largest institutions in the world, and as they allocate capital long-term, they provide a powerful structural support for Japanese equities going forward.”
Conclusion: Japan appears to be entering a new phase where sentiment, policy, and capital flows are aligning more positively than they have in decades.
From rising domestic confidence to structural advantages in technology and robotics, the market is evolving in meaningful ways. Japan is no longer just a cyclical story, but a structural one driven by long-term change in behaviour, ownership, and opportunity across its corporate landscape.
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The writer’s views are their own and do not constitute financial advice.
This information should not be relied upon by retail clients or investment professionals. Reference to any particular investment does not constitute a recommendation to buy or sell the investment.
Main image: japan, alex-knight-Ys-DBJeX0nE-unsplash
