The fundamentals look supportive for Japan which continues to be the darling of the ‘value’ crowd to such an extent that it is becoming a consensual asset allocation rather than the contrarian outcast it has been for the last twenty five years. Decent earnings growth, structural reforms, a stable and supportive political and monetary environment, much improved corporate governance and increasing flow of both domestic and foreign money into the stock market are all tailwinds. Japan is a particular beneficiary of stronger global growth and had notched up seven consecutive quarters of GDP growth, the best run for decades, before a 0.2% fall in Q1 this year snapped the streak. Hopefully this is a blip rather than a trend though growth is expected to be only around 1% in 2019. Earnings growth is expected to be in double digits this year, and the market P/E is 14x, relatively inexpensive by global standards, with a dividend yield of 2% which is a sea change from the previous experience of companies hoarding huge cash piles. Risks are of the ‘big picture global’ variety such as a slowdown in the global economy, trade wars escalation, a sharp rise in US Treasury yields or at the domestic level an unexpected volte-face in the direction of BOJ monetary policy or a stronger yen.