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JPMorgan Japanese swings to investments loss but Japan outlook hopeful

14th Dec 2022 10:16

(Alliance News) - JPMorgan Japanese Investment Trust PLC on Wednesday said it swung to an annual loss on investments and net asset value was down, but it remained optimistic about long-term investment opportunities in Japanese markets.

The FTSE 250-listed investment trust said investments loss in the financial year that ended September 30 was GBP418.2 million, swinging from a gain of GBP89.4 million a year earlier.

Net asset value per share on September 30 was 472.10 pence, down 36% from 735.50p a year earlier. Shares in JPMorgan Japanese were down 0.1% to 467.50p each in London on Wednesday morning.

Investments held at fair value on September 30 were also down 37% to GBP815.8 million from GBP1.30 billion a year earlier.

Despite the declining results, JPMorgan Japanese declared a final dividend of 6.20p, up 17% from 5.30p a year earlier. This took the financial 2022 total dividend to 7.48p, up 25% from 5.99p.

The trust said it remained optimistic in outlook, citing "appealing" investment opportunities in the Japanese market, while remaining aware of inflationary pressures and challenges surrounding the war in Ukraine.

"Japan's near-term economic outlook has improved since our last report. With the vaccine programme having been rolled out effectively, the government has recently lifted the last of its Covid restrictions and the country is now fully reopened to foreign tourism...While the US has rapidly increased rates, the Bank of Japan has so far maintained an ultra-loose monetary policy stance," said investment managers Nicholas Weindling and Miyako Urabe.

Weindling and Urabe also highlighted that the dollar has been trading at record highs against the yen, currently priced above JPY135, due to the wide disparity in interest rates between the US and Japan.

Both noted the weak yen made imports more expensive, which is a problem for Japan as it has few natural resources. This means it must import energy and other commodities.

Inflation in Japan remains lower than in most developed countries, however, they noted.

By Greg Rosenvinge, Alliance News reporter

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