Beyond Markets Sanaenomics and a new era for Japan’s economy
Nov 25, 2025
Louis Chua, an Asia equity research analyst at Julius Baer, dives into Japan's economic transformation driven by the growth-focused policies of its first female Prime Minister, Sanae Takaichi. He discusses how 'Sanaenomics' is revitalizing investment in infrastructure and tech, alongside a surprising rise in inflation and wage growth. Chua highlights the influence of activist investors on corporate reforms and the positive trends in Q3 earnings. He also examines the impact of a weakening yen and the attractiveness of Japanese bonds for global investors.
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Sanaenomics Is Growth-Focused
- Sanae Takaichi's Sanaenomics is a pro-growth, fiscal-expansion agenda focused on infrastructure, semiconductors and next-gen energy.
- This policy mix should support corporate earnings, domestic consumption and investor confidence.
Wage-Led Inflation Has Arrived
- Japan has moved from decades of deflation to meaningful inflation with a September print of 2.9% and wage growth near 5%.
- Wage-driven inflation boosts household purchasing power and helps sustain corporate earnings.
Corporate Reform Is Gaining Traction
- Corporate Japan shows early 'green shoots' from reforms driven by Tokyo Stock Exchange guidance and management focus on cost of capital.
- Companies are increasing buybacks, dividends and restructuring to improve ROEs and resource allocation.