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WisdomTree Insights
Japan has a new political anchor and a clearer economic path. The Tankan shows demand holding. Trade frictions look manageable. The Bank of Japan is edging toward normalisation without choking growth. Corporate reform is turning cash into returns. In this mix a currency hedged tilt to global exporters offers targeted access to earnings resilience with less currency noise.
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Japan has a new political anchor and a clearer economic path. The Tankan shows demand holding. Trade frictions look manageable. The Bank of Japan is edging toward normalisation without choking growth. Corporate reform is turning cash into returns. In this mix a currency hedged tilt to global exporters offers targeted access to earnings resilience with less currency noise.
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H1 2025 revealed uneven equity risk premia, with the US offering low valuation buffers amid tariff uncertainty, while Europe, Japan, and Emerging Markets (EMs) present higher equity risk premiums (ERPs) and stronger macro tailwinds. Investors may benefit from a barbell approach, holding US innovators while shifting capital to undervalued, high-premium regions where risks are better priced in.
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The US–Japan trade agreement has eased market uncertainty and improved sentiment, particularly for exporters and industrials. While it does not materially alter Japan’s growth outlook, it creates clearer sector opportunities. Financials, capital goods, and high-dividend stocks are now in focus as investors seek quality amid policy and macro shifts.
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What are 2025's best investment opportunities? WisdomTree has six high-conviction investment ideas: from US equities shifting away from mega-tech to Japan’s transformation, these six calls exemplify WisdomTree’s mission to deliver innovative, research-driven solutions in a world of constant change.
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The US market remains strong but overvalued. Emerging market small caps, European equities, and Japanese corporate reform stories provide attractive alternatives. Investors should balance growth exposure with defensive plays, keeping a close eye on political shifts, fiscal policies, and global economic trends.
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As we roll into the New Year, we reflect on various strong performing assets from 2024 and provide an outlook for the coming year. In part 1 of this two-part series, we look at Bitcoin, Japan and Small Cap Emerging Markets.
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