Alice French 2.2 4 ideas

Japan's pop culture exports now exceed its semiconductor exports. Tourism is booming due to the weak Yen. The weak Yen acts as a double subsidy: it makes Japanese IP (games, anime, merchandise) cheaper for global buyers and makes Japan a cheap destination for tourists who buy merchandise locally. Companies with strong global IP portfolios are effectively currency-hedged growth plays. LONG Japanese IP-heavy equities. A sudden strengthening of the JPY would reverse the tourism/export trend.

The TOPIX is trading around 18x forward earnings, the highest valuation in 20 years. The Nikkei has rallied significantly following political consolidation. While the structural reform story (corporate governance, weak yen) remains, the valuation expansion has been rapid. The market is now priced for perfection, making it vulnerable to profit-taking or a reversal in the Yen. NEUTRAL/WATCH. The "easy money" in the Japan trade has been made; upside is now limited by stretched valuations. A sudden strengthening of the JPY would hurt exporter earnings and compress multiples.