Japanese equity markets declined during the quarter amid ongoing volatility, driven by a combination of investor concern over the potential impact of looming tariffs on exporters and uncertainty on the timeline of future Bank of Japan (BoJ) rate hikes. In Tokyo, core consumer inflation accelerated throughout the period, remaining above the BoJ’s target and fueling market expectations of further rate increases. The standing belief that the BoJ will continue to increase rates over the near-term contributed to the Yen’s moderate appreciation during the quarter. Although we are not macro experts, we retain our view that Japan has exited its multi-decade period of deflation, and interest rates will normalize over the medium term.
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 03/31/2025.
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.
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