Investment Strategy

Japan: Is this time different?

Feb 28, 2024

Authors: Julia Wang, Cameron Chui, Yuxuan Tang, Weiheng Chen

On the last trading day of 1989, the Nikkei 225 closed at a record high of 38,915.87, bookending Japan’s multi-decade post-World War II growth boom and eye-popping asset price inflation of the 1980s. What followed after Japan’s asset bubble burst was three decades of deflation and anemic growth, as corporates and households paid down liabilities instead of borrowing at near-zero interest rates to invest and spend.

Occasional equity rallies since then have turned out to be head-fakes for investors, and markets were disappointed time and again by tentative efforts at reflation, reform and rejuvenation. Since the end of 1989, the S&P 500 and Euro Stoxx 50 are up 1,334% and 342% respectively (in price return terms), making Japan one of the most notable laggards in global markets.

JAPANESE STOCKS JUST GAINED THEIR FIRST NEW HIGH IN 34 YEARS

Nikkei 225 Index level, local currency

Source: Bloomberg Finance L.P Data as of February 26, 2024

Last week, more than 34 years later, the index finally closed above that record. The mood seems different now coming off a world-leading rally in 2023 and continued outperformance in 2024. Warren Buffett’s high-profile investments into Japan since 2020 also boosted sentiment. Market enthusiasm is elevated and international investors are starting to invest in Japan, betting that deflation is finally over and corporate governance reforms – first initiated a decade ago – are finally having an impact.

The improved outlook for Japan appears to be based on two key factors – an exit from long-running deflation (or reflation) and further support from corporate governance reforms. In this note, we detail what these factors mean for the equity market outlook and address the top questions that investors have about investing into Japan.

The strong rally has investors asking whether the market has run too far. We think no, and there is still a strong case for an overweight towards Japanese equities. Continued reflation driven by domestic demand and industrial investment can persist, and corporate governance reforms are likely to continue. Japanese equities are benefitting from multi-year structural factors and could continue to make new highs in the coming quarters on high single-digit earnings growth and valuations moderately above historical averages. Any pick up in global manufacturing activity could be an added cyclical tailwind. Longer-term, we expect potential double-digit equity returns. Uncertainties regarding growth and inflation would likely be met with a patient Bank of Japan (BoJ) that moderates excessive near-term yen strength. This is supportive for equities and presents opportunities for dollar-based investors.


The short answer is yes. Japan’s nominal GDP has broken out of a two-decade stagnation and we expect continued positive nominal GDP growth going forward. Inflation has also broadened across the economy and remained above the BoJ’s target of 2% for several quarters.

JAPAN’S NOMINAL GDP HAS BROKEN OUT OF A MULTI-DECADE RANGE

Nominal GDP, JPY trillions

Source: Bloomberg Finance L.P. Data as of December 31, 2023.

The long answer is that Japan appears to have both the conditions and willingness this time to truly escape deflation. In the near-term, inflation is expected to ease to 2% in 2024, tempering the need for serious policy tightening. In the coming years, inflation will likely be between 1.5-2.0%, a sweet spot that allows for generally accommodative macro policies.

Importantly, an inflationary mindset has started to take hold amongst households and corporates, evidenced by rising expectations for positive wage growth, which builds a virtuous cycle of rising wages and rising prices (and profits) – a stark contrast to the long-held deflationary stance of past decades that depressed consumption, investment and growth.

Compared with past reflation efforts that were domestic-focused, this time the global backdrop is also favorable. Japan’s industrial sector can benefit from a revival of industrial policies to support capex in semiconductors as a beneficiary of global supply chain reallocation. The government has committed $67 billion to subsidize building semiconductor manufacturing capabilities (an area Japan once dominated which has since declined in favor of other Asian producers). These advantages are reinforced by a large interest rate differential between Japan and other developed markets, which supports borrowing and investments within Japan.

JAPAN IS COMMITTING SUBSTANTIAL CAPEX TO SEMICONDUCTORS

Projects and announced subsidies for semiconductor projects in Japan

Source: Bloomberg Finance L.P., Ministry of Economy, Trade and Industry. Data as of February 2024.
Domestic consumption has not fully recovered to pre-Covid levels and remains a source of upside potential for reflation. More determined efforts by fiscal and monetary authorities to support inflation is an important factor, which they appear to be committed to.

DOMESTIC CONSUMPTION HAS ROOM TO IMPROVE FROM CURRENT LEVELS TO RETURN TO PRE-COVID TREND

Real consumption activity, indexed 2015 = 100 (LHS); Consumer confidence (RHS)

Source: Bank of Japan, Bloomberg Finance L.P. Data as of January 2024. 

In the wake of the asset bubble collapse, households and corporates deleveraged their balance sheets – opting to pay down debt rather than borrow to spend or invest in what is now known as a “balance sheet” recession. As such, many Japanese companies have tended to hoard cash instead of investing for growth, creating a vicious cycle that dragged on growth expectations and corporate valuations. 

Corporate governance reforms are not new in Japan and improvements started taking place in 2014 under a broader set of economic policies now known as “Abenomics”, initiated under former Prime Minister Shinzo Abe. Under those directives, Japanese corporates were required to implement practices such as: calculating cost of capital; explaining why returns did not meet the cost of capital; justifying cross shareholdings; adding more independent directors, etc. Consequently, share buybacks have steadily increased as a form of improving balance sheet efficiency.

JAPANESE SHARE BUYBACKS HAVE STEADILY INCREASED OVER THE PAST DECADE

Amount of share buyback announcements, JPY trillions

Source: Tokyo Stock Exchange. Data as of January 15, 2024.

Reforms have accelerated recently. The Tokyo Stock Exchange (TSE) has further encouraged increased urgency for Japanese companies to improve returns. A starting point is for companies to acknowledge their cost of capital, and for share price performance to be considered in decision-making. The TSE’s ultimate objective is to encourage active dialogue between Japanese corporates and shareholders in order to improve corporate governance, returns on equity, and valuations. The TSE is looking to publish a list of companies that have responded to such disclosure requests on the 15th of every month. 

Other areas of focus include increased English disclosure and effectiveness of communication with investors. Even for companies trading at high price-to-book ratios (P/B), the TSE has requested that they promote constructive dialogue aimed at improving corporate value over the medium to long-term. As companies meet current requirements, there is an increasing likelihood that the TSE could initiate other measures to further raise the corporate governance bar in the near future. In just the last six months, the percentage of compliant companies has risen to 49% from 31%. We have also started to see a number of prominent companies – such as Toyota – reduce cross-shareholdings as another way of addressing historical corporate governance concerns.

Simplistically, if we focus on companies with either net cash or significant cross-shareholdings and a P/B < 1, we estimate this universe at 100-150 corporates. Assuming this group of companies indeed see a re-rating to 1x P/B, this could add over 3% to the index.

SMALLER COMPANIES TEND TO HAVE LOWER PRICE-TO-BOOK (P/B) VALUATIONS IN JAPAN

P/B, percentage of companies in the TOPIX

Source: Bloomberg Finance L.P. Data as of January 22, 2024.

Clearly, there is no reason why re-rating needs to stop at 1x (the S&P 500 and Stoxx 50 trade at 4.6x and 2.1x respectively), but it does help to contextualize that the re-rating upside for the market due to corporate governance reforms is likely in the 3-10% range. We believe this offers plentiful opportunities for fund managers that are focused on value or event-driven strategies in Japan to meaningfully outperform.

A combination of several compelling factors are presenting structural and idiosyncratic reasons for investors to consider allocating capital to Japan:

  • Accommodative monetary policy relative to the developed world
  • A re-emergence of domestic inflation
  • Corporate governance reforms
  • Meaningful re-shoring efforts
  • Investors seeking alternatives to China

We believe this is likely to sustain the Japanese equity rally going forward, and we turn more positive on the market, increasing our base case TOPIX outlook to 2,700-2,750 (from 2,420-2,480). Over the next 12 months, we expect earnings to grow 8-9%, driven by semis, consumer discretionary and financials. The price-to-earnings (P/E) multiple can be maintained at 15x, only slightly above 10-year averages.

There is a very plausible case for the multiple to further re-rate as greater evidence of reflation and corporate governance changes materialize. In the years ahead we expect double-digit equity returns, as these structural changes and a stable global economic backdrop support higher potential earnings growth for Japanese corporates. International investors have also just started returning to Japanese equities after many years of persistent outflows, providing some support from a positioning perspective.

INTERNATIONAL INVESTORS HAVE ONLY JUST STARTED REVERSING YEARS OF PERSISTENT OUTFLOWS FROM JAPAN

Net foreign investment flows into Japanese stocks (USD billions)

Source: Bloomberg Finance L.P. Data as of February 23, 2024.
If reflation persists, corporate governance reforms accelerate to further drive meaningful operational efficiency improvements, international investors continue to further reduce their underweights, and manufacturing activity sees a cyclical recovery into 2025, it is plausible for the TOPIX to reach levels as high as 2,975-3,025 over the next 12 months, under a bull-case scenario.

JAPANESE EQUITIES COULD HAVE MORE LONGER-TERM UPSIDE

TOPIX end-2024 scenarios

Source: Bloomberg Finance L.P., J.P. Morgan Private Bank. Data as of February 26, 2024.

Japan saw negative GDP growth in the second half of 2023, but we think it could be a short and shallow recession. Looking under the hood of the GDP print, the primary drag in 2023 was weak household consumption. The upturn in inflation squeezed household spending, as it was not matched by a similar level of wage growth. Looking ahead to 2024, while the export outlook is challenged, domestic demand will likely lend more support to growth, which is dependent on real wage growth.

WEAK CONSUMPTION HAS BEEN A DRAG ON GROWTH

Real GDP growth contribution, %

Source: Cabinet Office, Haver Analytics. Data as of December 31, 2023.
Real wages will likely turn positive as inflation peaks, while wage growth could be higher and more broad-based. The key catalyst here is a process known as the “Spring Offensive” or (Shuntō), where every March, Japanese unions and employers negotiate wage increases. This offers an important signal for wage-setting by corporates around the country. Expectations are that nominal wage growth could be higher than the 3.6% achieved in 2023 and outpace inflation (now at 2-3%). This could support consumption, which is reinforced by rapidly recovering tourist spending.

REAL WAGES HAVE DECLINED SUBSTANTIALLY IN RECENT QUARTERS

Japan wages, indexed 2020=100, seasonally adjusted

Source: Ministry of Health, Labor & Welfare, Haver Analytics. Data as of December 31, 2023.

The second driver is the policy stance. Fiscal policy is likely to remain supportive in the form of income support and tax rebates, as the government looks to shore up flagging approval ratings. Investments in semiconductors will likely continue in line with a government push to put Japan in the global race to reorient supply chains.

While the growth outlook is moderate, we think Japan’s reflation still has some ways to run. Nominal GDP (which matters for corporate earnings) has also continued to grow even as real GDP is weak, in another sign that the transition to reflation is persisting.

We think the BoJ can afford to be gradual with monetary policy normalization in order to create more favorable conditions for continued reflation. For decades, the central bank has pursued ultra-accommodative monetary policy, such as quantitative easing (QE) and negative interest rate policy (NIRP) in a bid to reflate the economy, with little impact. However, the pandemic spike in inflation has broadened and Japan appears to be on a steadier reflation path, prompting expectations that the BoJ can finally exit its unconventional policy stance.

Many say that persistent inflation and soft growth (a ‘stagflation’-type scenario) posts a dilemma for the BoJ. We believe this is an ongoing balancing act, and recent weak economic data has validated their gradual approach to normalization. As the economy goes through a soft patch, more patience is warranted.

More sustained reflation, particularly in domestic demand, will likely be an important pre-condition for continued policy normalization. Assuming the economy moves out of recession, an exit from negative interest rates is our base case for 2024. Even so, real rates still remain highly accommodative and could continue to support investments going forward.

JAPANESE MONETARY POLICY REMAINS VERY ACCOMMODATIVE

Policy rate and yields, %

Source: Bloomberg Finance L.P. Data as of December 31, 2023.

While the possibility of further rate hikes beyond zero cannot be precluded, it is not our base case for this year and current market pricing (~30bps of hikes in 2024) seems aggressive.

Currency is a critical part of the Japan investment conversation, as performance could vary significantly in local currency versus USD terms. While the cumulative three-year total return of 50% for the TOPIX was eye-catching, the same return in USD is much more modest at below 10%.

Over this time period, the yen depreciated over 40% against the dollar and largely wiped out equity gains for investors that did not hedge the currency. Thus, getting the currency right is critical to generating equity returns in Japan. Fundamentally, the transmission mechanism is via export earnings in overseas currencies, which are translated back into the yen.

The key driver of the yen is interest rate differentials, or carry. The 10-year U.S. Treasury (UST) – Japan Government Bond (JGB) rate differential has explained over 80% of movements in USDJPY over the past two years. This explains the sharp deprecation in the yen since 2022 when the Fed embarked on aggressive rate hikes, while the BoJ maintained easing.

INTEREST RATE DIFFERENTIALS HAVE DRIVEN MOST OF THE MOVES IN USDJPY OVER THE PAST TWO YEARS

10-year UST-JGB spread (x-axis) vs. USDJPY (y-axis)

Source: Bloomberg Finance L.P. Data as of February 27, 2024. USD = U.S. Treasury. JGB = Japanese Government Bond.

We think the yen could strengthen modestly against the dollar over the next 12 months. With USDJPY at 150 at the time of writing, we think the room for the yen to weaken is limited, as we see some verbal intervention efforts from Japanese authorities. Historically, the Ministry of Finance has instructed direct market interventions to defend the currency around 148-152.

There could be more clarity that the Fed has finished hiking and that U.S. interest rates will likely trend lower, while JGB yields could hold or grind modestly higher, narrowing the interest rate differential. That said, investors may need to be patient – any yen strength is less likely to happen before the second half of 2024 when we expect the Fed to start delivering rate cuts.

In the meantime, investors have to be mindful of currency exposure. Yen cash has zero yield, and the carry against the dollar is around -5%. This means for USD-based investors, hedging the yen back to the dollar provides a “free” 5% and could be attractive. Borrowing in yen is also viable due to low interest rates – by borrowing and investing in the same currency, investors do not take significant directional FX risks.

Aside from a stronger yen, there are other factors that could cause Japanese equities to pull back:

  • Global manufacturing activity is weak, and this has historically led to negative earnings revisions for Japanese equities. There is some moderate earnings downside risk if this weakness is protracted. In addition, in the event the U.S. enters a recession, the Fed would likely cut rates aggressively and lead to an additional headwind for Japanese equities due to meaningful appreciation in the yen and weaker external demand.

POSITIVE TOPIX EARNINGS REVISIONS HAVE NOT BEEN SUPPORTED BY RECENT PMI TRENDS

Global manufacturing PMI vs. TOPIX earnings revisions, 3-month moving average, %

Source: J.P. Morgan Investment Bank, Datastream, S&P Global, Haver Analytics. Data as of January 31, 2024.
  • With increased investor excitement in Japanese markets, valuation multiples have also re-rated. Both historically and relative to the Euro Stoxx 600 (another historically cyclical index), Japanese equity valuations are near 10-year highs. With currently overbought conditions and increased valuations, we could see tactical pullbacks in the market. A marked improvement in global sentiment on China, though unlikely in the near-term, could also lead to some reversal of flows from Japan back to China.

JAPANESE EQUITY VALUATIONS HAVE RE-RATED RELATIVE TO HISTORY AND EUROPEAN MARKETS

Valuation levels

Source: Bloomberg Finance L.P. Data as of February 19, 2024.
  • Inflation concerns have led Prime Minister Kishida’s approval ratings to fall to levels that led to both his two predecessors resigning. The Japanese equity market has historically performed poorly when a reformer (such as PM Kishida) loses power due to uncertainty over future policy direction.
  • Skeptical investors reasonably maintain that Japan remains a slow-growing economy with fundamental challenges, such as poor demographics and global competition, which clouds its long-term economic outlook. Thus, an active and approach to investing into Japanese equities is essential for capturing upside growth opportunities.

The thesis for stronger equity market performance is based on idiosyncratic and structural developments that can boost certain segments of the economy and markets while unlocking greater shareholder value from its corporations.

GLOBAL INVESTORS TEND TO BE UNDERWEIGHT IN JAPANESE EQUITIES

MSCI All Country World Index geographical allocation

Source: Bloomberg Finance L.P. Data as of February 26, 2024.
From a portfolio perspective, most global investors have been underweight Japanese equities for years. Within the context of a globally-diversified portfolio, we are constructive on closing those structural underweights and moving to a slightly overweight allocation.

All market and economic data as of February 28, 2024 and sourced from Bloomberg Finance L.P. and FactSet unless otherwise stated.

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Index definitions

The Nikkei-225 Stock Average is a price-weighted average of 225 top-rated Japanese companies listed in the First Section of the Tokyo Stock Exchange. The Nikkei Stock Average was first published on May 16, 1949, where the average price was ¥176.21 with a divisor of 225.

The Standard and Poor's 500 Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The index was developed with a base level of 10 for the 1941-43 base period.

The EURO STOXX 50 Index, Europe's leading blue-chip index for the Eurozone, provides a blue-chip representation of supersector leaders in the Eurozone. The index covers 50 stocks from 12 Eurozone countries. The Index is licensed to financial institutions to serve as underlying index for a wide range of investment products such as Exchange Traded Funds (ETF), Futures and Options and structured products.

TOPIX also known as the Tokyo Stock Price Index, is a capitalization-weighted index of all companies listed on the First Section of the Tokyo Stock Exchange.

STOXX Europe 600 Index (SXXP Index): An index tracking 600 publicly traded companies based in one of 18 EU countries. The index includes small cap, medium cap, and large cap companies. The countries represented in the index are Austria, Belgium, Denmark, Finland, France, Germany, Greece, Holland, Iceland, Ireland, Italy, Luxembourg, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom.

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Morgan SE – Stockholm Bankfilial, with registered office at Hamngatan 15, Stockholm, 11147, Sweden, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – Stockholm Bankfilial is also supervised by Finansinspektionen (Swedish FSA); registered with Finansinspektionen as a branch of J.P. Morgan SE. In Belgium, this material is distributed by J.P. Morgan SE – Brussels Branch with registered office at 35 Boulevard du Régent, 1000, Brussels, Belgium, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB);  J.P. Morgan SE Brussels Branch is also supervised by the National Bank of Belgium (NBB) and the Financial Services and Markets Authority (FSMA) in Belgium; registered with the NBB under registration number 0715.622.844. In Greece, this material is distributed by J.P. Morgan SE – Athens Branch, with its registered office at 3 Haritos Street, Athens, 10675, Greece, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – Athens Branch is also supervised by Bank of Greece; registered with Bank of Greece as a branch of J.P. Morgan SE under code 124; Athens Chamber of Commerce Registered Number 158683760001; VAT Number 99676577. In France, this material is distributed by J.P. Morgan SE – Paris Branch, with its registered office at 14, Place Vendome 75001 Paris, France, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB) under code 842 422 972; J.P. Morgan SE – Paris Branch is also supervised by the French banking authorities the Autorité de Contrôle Prudentiel et de Résolution (ACPR) and the Autorité des Marchés Financiers (AMF). In Switzerland, this material is distributed by J.P. Morgan (Suisse) SA, with registered address at rue du Rhône, 35, 1204, Geneva, Switzerland, which is authorised and supervised by the Swiss Financial Market Supervisory Authority (FINMA) as a bank and a securities dealer in Switzerland.

This communication is an advertisement for the purposes of the Markets in Financial Instruments Directive (MIFID II) and the Swiss Financial Services Act (FINSA). Investors should not subscribe for or purchase any financial instruments referred to in this advertisement except on the basis of information contained in any applicable legal documentation, which is or shall be made available in the relevant jurisdictions (as required).

In Hong Kong, this material is distributed by JPMCB, Hong Kong branch. JPMCB, Hong Kong branch is regulated by the Hong Kong Monetary Authority and the Securities and Futures Commission of Hong Kong. In Hong Kong, we will cease to use your personal data for our marketing purposes without charge if you so request. In Singapore, this material is distributed by JPMCB, Singapore branch. JPMCB, Singapore branch is regulated by the Monetary Authority of Singapore. Dealing and advisory services and discretionary investment management services are provided to you by JPMCB, Hong Kong/Singapore branch (as notified to you). Banking and custody services are provided to you by JPMCB Singapore Branch. The contents of this document have not been reviewed by any regulatory authority in Hong Kong, Singapore or any other jurisdictions. You are advised to exercise caution in relation to this document. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. For materials which constitute product advertisement under the Securities and Futures Act and the Financial Advisers Act, this advertisement has not been reviewed by the Monetary Authority of Singapore. JPMorgan Chase Bank, N.A., a national banking association chartered under the laws of the United States, and as a body corporate, its shareholder’s liability is limited.

With respect to countries in Latin America, the distribution of this material may be restricted in certain jurisdictions. We may offer and/or sell to you securities or other financial instruments which may not be registered under, and are not the subject of a public offering under, the securities or other financial regulatory laws of your home country. Such securities or instruments are offered and/or sold to you on a private basis only. Any communication by us to you regarding such securities or instruments, including without limitation the delivery of a prospectus, term sheet or other offering document, is not intended by us as an offer to sell or a solicitation of an offer to buy any securities or instruments in any jurisdiction in which such an offer or a solicitation is unlawful. Furthermore, such securities or instruments may be subject to certain regulatory and/or contractual restrictions on subsequent transfer by you, and you are solely responsible for ascertaining and complying with such restrictions. To the extent this content makes reference to a fund, the Fund may not be publicly offered in any Latin American country, without previous registration of such fund´s securities in compliance with the laws of the corresponding jurisdiction. 

References to “J.P. Morgan” are to JPM, its subsidiaries and affiliates worldwide. “J.P. Morgan Private Bank” is the brand name for the private banking business conducted by JPM. This material is intended for your personal use and should not be circulated to or used by any other person, or duplicated for non-personal use, without our permission. If you have any questions or no longer wish to receive these communications, please contact your J.P. Morgan team.

JPMorgan Chase Bank, N.A. (JPMCBNA) (ABN 43 074 112 011/AFS Licence No: 238367) is regulated by the Australian Securities and Investment Commission and the Australian Prudential Regulation Authority. Material provided by JPMCBNA in Australia is to “wholesale clients” only. For the purposes of this paragraph the term “wholesale client” has the meaning given in section 761G of the Corporations Act 2001 (Cth). Please inform us if you are not a Wholesale Client now or if you cease to be a Wholesale Client at any time in the future.

JPMS is a registered foreign company (overseas) (ARBN 109293610) incorporated in Delaware, U.S.A. Under Australian financial services licensing requirements, carrying on a financial services business in Australia requires a financial service provider, such as J.P. Morgan Securities LLC (JPMS), to hold an Australian Financial Services Licence (AFSL), unless an exemption applies. JPMS is exempt from the requirement to hold an AFSL under the Corporations Act 2001 (Cth) (Act) in respect of financial services it provides to you, and is regulated by the SEC, FINRA and CFTC under US laws, which differ from Australian laws. Material provided by JPMS in Australia is to “wholesale clients” only. The information provided in this material is not intended to be, and must not be, distributed or passed on, directly or indirectly, to any other class of persons in Australia. For the purposes of this paragraph the term “wholesale client” has the meaning given in section 761G of the Act. Please inform us immediately if you are not a Wholesale Client now or if you cease to be a Wholesale Client at any time in the future.

This material has not been prepared specifically for Australian investors. It:

  • may contain references to dollar amounts which are not Australian dollars;
  • may contain financial information which is not prepared in accordance with Australian law or practices;
  • may not address risks associated with investment in foreign currency denominated investments; and
  • does not address Australian tax issues.

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JPMorgan Chase Bank, N.A. and its affiliates (collectively "JPMCB") offer investment products, which may include bank-managed accounts and custody, as part of its trust and fiduciary services. Other investment products and services, such as brokerage and advisory accounts, are offered through J.P. Morgan Securities LLC ("JPMS"), a member of FINRA and SIPC. Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. JPMCB, JPMS and CIA are affiliated companies under the common control of JPMorgan Chase & Co. Products not available in all states. Please read the Legal Disclaimer in conjunction with these pages.

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