The investment house oversees $510 billion in AuM.

Increased government spending makes interest rate hikes more likely, boosting earnings of banks that are a significant component of most value investors’ portfolios, Asset Management One said in a recent note. 

As investors digest the impact of rising energy prices amidst the Iran conflict vs Israel and the US, positions evolve from what had been a broadly positive set of views about Japanese equities that have come out since Takaichi’s Liberal Democrat Party’s landslide general-election victory in a snap poll a few weeks ago. Several investment managers such as SuMi TRUST, a large Japanese asset manager, Invesco and Amundi have set out positive views about Japanese equities in 2026. See here.

Upward pressure on interest rates – potentially benefiting banks – will also come if the Gulf war endures to keep energy prices elevated, Asset Management One said. 

The firm noted that Japan had negative rates in recent years, leaving share prices of many Japanese banks deep in value territory. Japan’s escape from deflation and its gradual normalisation of interest rates has led to a widening of the spread between the short- and long-term interest rates. 

By way of international comparison, the firm said that although Japanese equity valuations are rising, they’re still undervalued compared to other developed markets. Japanese large and mid-cap companies have an average price-to-book ratio (PBR) of 2, (source: MSCI) whereas their British, European and US counterparts have PBR scores of 2.48, 2.52 and 5.4 respectively. Globally, the average PBR is 3.93.

Asset Management One added that Japan was “the standout performer” among developed markets in 2025, with the Topix index rising by 22.4 per cent, thanks in part to the strong performance of value shares.

As reported here, Joost van Leenders, senior investment strategist at Dutch wealth manager Van Lanschot Kempen, recently said he sees no reason to adjust his investment policy, despite the Gulf conflict. His stance was shared by Samy Chaar, chief economist, CIO Switzerland at Swiss private bank Lombard Odier, who told this news service that he remains invested across the US, Europe, Asia, and he is not planning to sell or change portfolios as a result of the conflict.