(Alliance News) - Fidelity Japan Trust PLC on Wednesday lamented that "the market rally" from 2023 into this year was mostly driven by large-cap value stocks, but positively noted the country's "extensive" corporate governance reforms.

The Japan-focused investment trust said net asset value per share grew 12% to 204.46 pence as at December 31 from 182.24p a year prior.

Fidelity Japan said that medium and smaller-sized companies underperformed and now look undervalued, as it was mostly large-cap value stocks that enjoyed a market rally in 2023 and into 2024.

The company's NAV return was positive 12.2% in 2023, underperforming against the benchmark Topix total return index which delivered a return of positive 13.3%.

Chair David Graham said: "Foreign investors are taking renewed interest in Japan, encouraged by the extensive corporate governance reforms currently being promoted by the Tokyo Stock Exchange.

"In addition, Japan’s central bank raised its benchmark interest rate on 19 March 2024 to a range of 0 to 0.1% for the first time in 17 years, ending a longstanding policy of negative rates in order to boost the economy."

Fidelity Japan shares were 0.5% higher at 183.32 pence late on Wednesday morning in London.

By Tom Budszus, Alliance News slot editor

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