Japanese companies remain well positioned to return cash to shareholders We continue to see an underappreciated earnings improvement story underway that should continue to support Japanese equities. Three decades of deflation has led to corporations and individuals stock-piling their cash. We are now seeing ongoing reforms, led by the Tokyo Stock Exchange and various government institutions, aimed at improving governance and capital efficiency. These reforms are being introduced alongside incentives such as the NISA tax free investment scheme for individuals. Such initiatives should help to put excess cash to work and raise what are exceptionally low rates of equity ownership relative to other developed markets. As a result, we are seeing greater focus on shareholder returns as well as increased investment and capital spending.