Why Japan is becoming increasingly attractive as both a travel destination and an investment opportunity

Why Japan is becoming increasingly attractive as both a travel destination and an investment opportunity

According to a report by www.zeit.de, Japan has become an attractive travel destination for Europeans due to three decades of deflation and a sharp devaluation of the yen. Life in Japan has become so cheap that it is comparable to Thailand. This situation has led to many Western vacationers, particularly from France and Italy, traveling to Japan. But not only tourism is booming, Japanese stocks are also cheap. The Nikkei 225 index has gained more than 25 percent since the beginning of the year and is expected to become the most successful stock market in the world. The article explains that the change in corporate culture in Japan has proven to be one of the main reasons for attracting investors. Many Japanese companies have announced plans to buy back shares, leading to higher prices, and an increasing number of companies are now also paying dividends. In addition, the Japanese economy benefits from moderate inflation and the Bank of Japan's loose monetary policy. Low interest rates are weakening the yen and making Japanese exports in demand worldwide. The Japanese economy could grow by six percent this year. Japan has gained prominence as an “investable” relative to China in recent years, particularly after star US investor Warren Buffett invested in some Japanese trading companies. Many investors have followed his example and increased their positions in Japanese stocks. However, there are concerns that share prices have risen too quickly and too much, which could lead to a potential decline. However, long-term investors should not be deterred from Japanese stocks, according to the article, as corporate profits are expected to continue rising. It is recommended to gradually build up a Japan position and use ETFs or actively managed Japan funds. However, it is noted that investors should be cautious as the yen devaluation, while beneficial for tourists, can be a nuisance for international investors.