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Japan - The Land of Rising Investments

In a global environment of high interest rates with slowing growth accompanied by high inflation, despite this investors are getting upbeat about Japan for the last few quarters. Various big brokerages, hedge funds and investors like Warren Buffet have started to deploy their resources in expectation of higher and longer positive returns.

During the last three decades or a little more Japan has always been viewed as a country past its prime as the inflation was low or near zero despite many interventions by the government and central bank. Even the large technology companies that were established in the country moved their production out of the country.

This trend is reversing now with accelerated speed as inflation is rising to 30 years high while the interest rate and other policies remain favourable. Many home-based companies and even large technology like TSMC are setting up new plants. All this has caught the eye of investors and has resulted in the Nikkei ( stock index) rising past 33 years high.

There are various factors in favour of this reversal but the main reason can be geopolitical as the USA and China tussle over trade and security. This favours Japan in a big way as it already has many technological ecosystems resulting in becoming one of the biggest future trade and security partners of the USA.


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