Investment Insider: UK firms to prosper from Japan's revival

Abenomics is aiming to turn around the country's fortunes

The running joke among many investors was that the Land of the Rising Sun had turned into the Land of the Setting Sun.

That was until Prime Minister Shinzo Abe took a leaf out of US Federal Reserve chief Ben Bernanke's book and pumped trillions of yen into the Japanese economy. The scheme has become so noteworthy that it even has its own name, Abenomics.

Mr Abe's plan is simply to drive down the yen, reflate asset prices and most of all push up inflation. By driving up the cost of living, or even just the expectation that prices could rise, Mr Abe hopes to encourage Japan's consumers to spend. By doing so he hopes to stimulate the economy back to growth. Abenomics is showing early signs of working.

It has even helped Japanese electronics giant Sony post its first annual profit in five years. Naturally, some UK companies that are still exposed to Japan are hoping to make the most of Japan's economic revival. After all, it is still the third-largest economy in the world. Some though, such as Tesco, have given up on the country. Tesco announced last year that it would exit Japan after nine years.

An economic revival in Japan could augur well for the country's electronics and electrical industry. That could, in turn, bode well for London-listed Chilean copper miner Antofagasta, which derives a third of its sales from Japan. The company's mine, Los Pelambres, which is high up in the Andes, is a joint venture with a Japanese consortium.

Japan's revival may be good news for British American Tobacco, which, despite its name, hardly sells any cigarettes in the UK. Its main markets, instead, are in the Asian Pacific region that includes Japan. The company is expected to report another rise in profits this year with a hike in dividends on the cards too.

HSBC opened its first office in the port city of Yokohama in 1866 and it is still there today, though it may regret its decision to withdraw from retail banking. Nevertheless, it will retain its securities and asset management operations there. Standard Chartered is also present in Japan and it too commenced operations in Yokohama, though some 14 years later than HSBC. Standard Chartered is expected to post a 25 per cent jump in profits this year and a 3 per cent rise the year after, which may be revised if Japan's economic outlook improves significantly.

GlaxoSmithKline has made the unlocking of the geographic potential of its business, especially in emerging markets and Japan, one its three strategic priorities. In the first quarter, revenues from Japan rose 11 per cent, excluding the sales of Cervarix. The company also saw strong sales in respiratory medicines as a result of a strong start to the pollen season.

Reckitt Benckiser sells a number of brands in Japan that include Air Wick, Clearasil, Finish and Durex. However, it was Scholl that the consumer-goods maker singled out as a star performer in Japan. The company said that sales in the fourth quarter in its Latin America and Pacific region grew 27 per cent, thanks to exceptionally strong sales of its footwear and footcare brand in Japan. Scholl was acquired when Reckitt Benckiser bought SSL International in 2010.

David Kuo is director of

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Digital Optimisation Executive - Marketing

    £30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

    Recruitment Genius: Financial Reporting Manager

    £70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

    Recruitment Genius: Payments Operations Assistant

    £23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

    Recruitment Genius: Telephone Debt Negotiator

    £13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

    Day In a Page

    Sepp Blatter resignation: The beginning of Fifa's long road to reform?

    Does Blatter's departure mean Fifa will automatically clean up its act?

    Don't bet on it, says Tom Peck
    Charles Kennedy: The baby of the House who grew into a Lib Dem giant

    The baby of the House who grew into a Lib Dem giant

    Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
    Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

    The harrowing testament of a five-year-old victim of Syria's endless civil war

    Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
    The future of songwriting: How streaming is changing everything we know about making music

    The future of songwriting

    How streaming is changing everything we know about making music
    William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

    Recognition at long last

    Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
    Beating obesity: The new pacemaker which helps over-eaters

    Beating obesity

    The new pacemaker which helps over-eaters
    9 best women's festival waterproofs

    Ready for rain: 9 best women's festival waterproofs

    These are the macs to keep your denim dry and your hair frizz-free(ish)
    Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

    Wiggins worried

    Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
    Liverpool close in on Milner signing

    Liverpool close in on Milner signing

    Reds baulk at Christian Benteke £32.5m release clause
    On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

    On your feet!

    Spending half the day standing 'reduces risk of heart attacks and cancer'
    With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

    The big NHS question

    Why are there so few new GPs when so many want to study medicine?
    Big knickers are back: Thongs ain't what they used to be

    Thongs ain't what they used to be

    Big knickers are back
    Thurston Moore interview

    Thurston Moore interview

    On living in London, Sonic Youth and musical memoirs
    In full bloom

    In full bloom

    Floral print womenswear
    From leading man to Elephant Man, Bradley Cooper is terrific

    From leading man to Elephant Man

    Bradley Cooper is terrific