Despite its vast economic problems, Japan may be ripe for investment, but only for the long haul, international money managers at T. Rowe Price Group Inc. said yesterday.
"There are encouraging signs in Japan," said John Ford, chief investment officer of T. Rowe Price International, who spoke to institutional clients yesterday at the Harbor Court Hotel in Baltimore. "We are really looking for a change in tack in Japan."
Ford and other money managers at Price are encouraged because of the rise of Junichiro Koizumi, the bold reformer, who last month was elected the country's prime minister in a stunning upset.
They hope Koizumi can energize the country by pulling it out of a 10-year economic lull. Already, his approval rating among Japan's citizens is about 87 percent. Yet, unemployment is about 5 percent, near its record highs; bankruptcies are soaring; and banks are wrestling with problem loans.
"I have suffered this market for the past 15 years," David Warren, president and chief executive of T. Rowe Price International and manager of Japanese equities, told the group. "I will take anything that smells of good news. I think this is good news."
Price has about $5.5 billion invested in Japanese companies, and that stake is "inching" upward, Ford said after the meeting. He said he likes companies that include NTT DoCoMo Inc., a wireless network provider; Sony, which makes the popular Playstation 2, and Canon Inc., which makes copy machines and has benefited from Xerox Corp.'s problems.
"It is just possible that we are getting the first glimmer of a catalyst," Ford said after the meeting.
But he cautioned that investors should realize that it could take five years before an investment pays off.
"It is not a riskless situation," he said.