Japan 2026 outlook

Templeton Global Investments sees Japanese equities at the center of a powerful regime shift, as the country moves from decades of deflation toward a more normal, inflation_score-driven economy. This transition is lifting corporate pricing power, supporting wage growth and investment, and laying the groundwork for multiyear earnings expansion.

At the same time, sweeping corporate reforms are sharpening management focus on shareholder returns and driving structural improvements in profitability. As Japan’s growth profile and return on equity converge toward global peers, TGI believes there is room for valuation multiples to re-rate from long-standing discounts.

Within this backdrop, they favor domestplanation-focused banks and industrials poised to benefit from stronger domestic activity, while remaining selective in global earners with exposure to durable growth themes such as semiconductors, infrastructure and aerospace.