Global Equity Pulse: Japan’s compelling case—an updated view

Japanese equities continue to offer a compelling story in 2026, supported by economic normalization, sustained inflation and deepening corporate reforms that prioritize shareholder returns. Company meetings across Japan suggest management teams are increasingly focused on disciplined capital allocation and consistent growth execution, reinforcing confidence in the asset class. Globally, cyclical and consumer discretionary names appear well placed to benefit from stronger liquidity conditions and solid household balance sheets, while defense, industrials and select technology areas gain from structural spending on AI infrastructure, energy transition and security.

Across Asia Pacific, earnings momentum is improving as trade headwinds ease, with Taiwan and South Korea poised to leadary growth thanks to AI-related capex and firmer memory pricing. Europe is emerging from a decade of underperformance with renewed policy coordination, higher investment in competitiveness and defense, as well as attractive dividends that could support a more durable return profile for long-term investors.