1 Lowest valuations among developed equity markets. 50% of companies trade below book value
2 Improving profitability. Average Returns on Invested Capital (ROIC) for MSCI Japan has improved to be the same as the US
3 Positive corporate governance changes. There have been many changes over the years but the most recent one is where the Tokyo Stock Exchange has requested companies trading below book value to come up with capital improvement plans
4 Very Strong balance sheets. 40% of companies have net cash > 20% of equity
5 Companies returning record capitals to shareholders in the form of dividends and share buybacks