Japanese equities rose over the quarter, led by technology and AI-linked names that continued to attract strong investor demand. The Bank of Japan’s ongoing shift away from ultra-loose policy was a central theme, culminating in a rate hike that markets read as a vote of confidence rather than a threat, since it signaled underlying economic durability and gave policymakers more room to respond to future downturns. Inflation pressures built steadily, driven in part by rising energy costs tied to Middle East tensions, though optimism around progress toward a resolution helped ease some of those concerns as the quarter wore on. A weaker yen also supported the advance, boosting the earnings outlook for export-oriented companies, even as it kept policymakers alert to the possibility of currency intervention. Resilient earnings and continued foreign investor interest rounded out the supportive backdrop for the quarter.
Past performance is no guarantee of future results.
The specific securities identified and described in this report do not represent all the securities purchased, sold, or recommended to advisory clients. There is no assurance that any securities discussed herein will remain in an account’s portfolio at the time one receives this report or that securities sold have not been repurchased. It should not be assumed that any of the securities, transactions, or holdings discussed herein were or will prove to be profitable. Holdings are representative of Harris Associates L.P.’s Japan Unhedged composite as of 06/30/2026.
Certain comments herein are based on current expectations and are considered “forward-looking statements”. These forward looking statements reflect assumptions and analyses made by the portfolio managers and Harris Associates L.P. based on their experience and perception of historical trends, current conditions, expected future developments, and other factors they believe are relevant. Actual future results are subject to a number of investment and other risks and may prove to be different from expectations. Readers are cautioned not to place undue reliance on the forward-looking statements.
The information, data, analyses, and opinions presented herein (including current investment themes, the portfolio managers’ research and investment process, and portfolio characteristics) are for informational purposes only and represent the investments and views of the portfolio managers and Harris Associates L.P. as of the date written and are subject to change without notice. This content is not a recommendation of or an offer to buy or sell a security and is not warranted to be correct, complete or accurate.
