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Good companion read to Matt Klein's recent take: https://theovershoot.co/p/looking-at-japan-with-ft-unhedged

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Oct 23, 2022Liked by Jesper Koll

Great insights, as always. Certainly, I am also seeing tremendous GILC and OI in the professional services sector in Japan. The issue is, in USD terms, the returns are shrinking and the talent can’t be reused in other regions due to the low English skill. Still, there is a lot of money to be made all the same.

I’d be interested in hearing your forecast for M&A activity in Japan. Japanese companies were hedging against the shrinking local population/market with inorganic growth. That will be prohibitively costly for many Japanese concerns now. On the contrary, I assume Japanese companies should be prime targets, with the coming recession accelerating deals. Your view of this would be a great read.

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In one of your earlier articles, you mentioned that some sectors of the Japanese economy have a hyper-competitive industrial structure. Can you provide links to the data for this? I can't find much evidence of it in the sectors I've looked at when I look at market share, except for the retail supermarket sector.

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How does Japan's enormous debt weigh on future growth? I suspect the Feds in the US, while feigning to stop inflation, are merely lessening it as a way to grow out of the ridiculous deficit here but Japan is keeping rates low.

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