Japan Equities
Today’s price sits at the 61.7th percentile of modeled fair value — 34% of modeled scenarios put fair value above the market.
- Median fair value
- 96.8
- Upside to median
- -3.2%
- Last close
- $96.51
- Confidence
- moderate-high
Return distributions, not point forecasts
Percentiles describe the spread of scenario outcomes under the stated method. The width of the range carries as much information as the midpoint.
One year
modeled- P90
- +25.0%
- P75
- +16.5%
- Median
- +7.0%
- P25
- -3.0%
- P10
- -17.0%
62% of modeled scenarios end positive.
Dividend yield of roughly 2.2% plus sustainable nominal earnings growth of about 6.0%, reflecting the end of deflation and governance-driven capital efficiency, less 25% of the modeled -3.2% fair-value gap converging within the year. Buybacks are treated as inside earnings growth rather than added separately. The benchmark is unhedged, so yen exposure widens the quantiles materially. The scenario-implied beat probability is diagnostic only and is read against the 4.58% one-year Treasury par hurdle.
Three years, annualised
modeled- P90
- +13.5%
- P75
- +10.0%
- Median
- +6.0%
- P25
- +2.0%
- P10
- -3.0%
Three-year explicit model: dividend and buyback yield plus nominal earnings growth partially normalized toward Japanese nominal GDP, with the modeled fair-value gap closing over three years at a terminal forward multiple in the 16x to 17x range, discounted at the one-year Treasury hurdle plus a 5.0% Japanese equity risk premium.
Against the Treasury hurdle
- 1y Treasury
- 4.58%
- Expected excess
- +2.4%
- Basis
- proxy
The 4.58% one-year Treasury par yield is a dollar hurdle while the benchmark carries unhedged yen exposure, so the modeled 2.42 percentage point edge is a proxy. Japanese policy rates and sovereign yields are not supplied, and rising domestic long rates are a headwind the structured input cannot measure.
5 in this asset class
| Symbol | Valuation | Fair value | Last close | 1y modeled |
|---|---|---|---|---|
| DXJ Japan Hedged Equity | -0.7Somewhat expensive | 96.8 | $178.22 | +7.0% |
| EWJ Japan Broad Market | -0.7Somewhat expensive | 96.8 | $96.51 | +7.0% |
| EWJV Japan Value Equity | +0.6Somewhat cheap | 104.0 | $48.06 | +8.8% |
| JPXN Japan JPX-Nikkei 400 | -0.5Somewhat expensive | 98.0 | $102.33 | +7.3% |
| SCJ Japan Small-Cap Equity | +0.4Somewhat cheap | 103.0 | $108.63 | +8.6% |