Written by Ilaria Massei
Japanese equities rose last week, with the MSCI Japan Index up +1.0% in GBP terms, supported by a corporate development that highlights how governance reforms are continuing to reshape the investment landscape.
Corporate governance refers to how companies are managed, how decisions are made, how management behaves, and how shareholders are treated. Strong governance means that companies are more transparent, accountable, and disciplined in how they use capital – crucial elements for delivering long-term value to investors.
The key news came from Nippon Telegraph and Telephone (NTT), which announced plans to take full control of its listed subsidiary, NTT Data. NTT plans to purchase the remaining shares it doesn’t already own, offering a 35% premium over the stock’s closing price of the day before the announcement. This signals a shift in how shareholders are considered in Japan. In the past, similar deals were usually structured to favour the parent company, with little consideration for minority shareholders. Offers often came with minimal premiums – or even at a discount – and shareholder rights were frequently overlooked.
The NTT transaction is a strong example of how improved governance can unlock value for investors. It reflects the broader progress Japan has made over the past decade, following the introduction of economic reforms under former Prime Minister Shinzō Abe, who led Japan from 2012 to 2020. A key pillar of his “Abenomics” agenda was corporate governance reform, aimed at making Japanese companies more efficient, transparent, and shareholder-focused.
Developments like these in Japan highlight the importance of maintaining a globally diversified portfolio, as investment opportunities tend to emerge at different times across different regions.
Elsewhere, the UK also made headlines after finalising a long-anticipated trade deal with the US. While the baseline 10% tariff on UK goods remains, the agreement will remove tariffs on steel and aluminium (previously 25%) and provide reciprocal access for products like beef and ethanol. The UK car industry also welcomed a key outcome as tariffs on vehicle exports to the US will drop from 27.5% to 10%.
In a separate development, the Bank of England cut interest rates by 25 basis points to 4.25% as inflationary pressures continue to ease and concerns about slowing domestic growth come to the forefront. The rate cut didn’t lift the broader UK equity market, with the FTSE All Share Index ending the week slightly down (-0.1%). However, the FTSE 250 Index – made up of mid-sized companies that are more sensitive to the UK economy and interest rates – rose by +1.3%.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 12th May 2025.
© 2025 YOU Asset Management. All rights reserved.
