Hiromi Yamaji 1.6 9 ideas

"The notion of every company needing a plan to get above one times book and essentially using shame as a tool for reform has been very, very effective." Delistings jumped from 50 to 125 last year as companies rethink listing. The Tokyo Stock Exchange's mandate is forcing management teams to either unlock value (via buybacks, dividends, and spin-offs) or go private (MBOs). Both outcomes are accretive to shareholders. This creates a floor for Japanese valuations and drives a structural bull market in Japan's broad indices. Long broad Japan exposure to capture the beta of corporate reform. A strengthening Yen (JPY) could hurt the export-heavy components of these indices (Toyota, Sony, Panasonic).

"Japanese companies are starting to use that cash to change the way they do business... receptive for new development of technologies like A.I... Japan is well-positioned for the industrial renaissance." The "Senkaku" reform is forcing companies to stop hoarding cash and start spending on CapEx and technology to boost productivity. This shift from balance sheet safety to active investment drives equity valuations higher. Sony is explicitly named as a company already working with Apollo to finance this transformation. Long Japanese equities (specifically broad indices or industrial/tech leaders like Sony) to capture the productivity uplift. Global recession dampening demand for Japanese industrial exports.

Japan faces a severe labor shortage due to aging. Yamaji states, "Japanese companies has been making huge investment into automation or digitization... very important to enhance productivity." The labor shortage is not a headwind but a capex driver. Japanese industry must automate to survive. This guarantees sustained demand for robotics, industrial automation, and AI software providers servicing Japanese corporates. LONG Robotics and AI automation themes with exposure to Japanese industrial capex. High implementation costs or slower-than-expected technological adoption.

50% of Japanese household assets (¥2,000 trillion) are in cash. Inflation is now 3%. Yamaji notes a record high in buybacks and dividends as companies are forced to improve capital efficiency. Cash is trash in a 3% inflation environment. A "Great Rotation" is underway where domestic Japanese savings must enter the equity market to preserve purchasing power. This creates a structural bid for Japanese equities independent of foreign flows. LONG. DXJ (currency hedged) is preferable if the Yen weakens due to Takaichi's fiscal spending; EWJ if the Yen strengthens. If the BOJ hikes rates too aggressively, it could choke off the nascent growth.