According to the financial news app, Mizuho Financial's asset management company, Asset Management One (AM-One), plans to launch an actively managed fund focusing on large cap stocks in Japan by the end of the year. This reflects their confidence in the recovery of the Japanese stock market and an expectation that investors will refocus on the domestic market.

In an interview, AM-One's president Noriyuki Sugihara revealed that the company's goal is to expand the investment trust to 500 billion yen (approximately 3.4 billion dollars) in the next 5 to 10 years. He pointed out that the new fund will focus on approximately 50 large cap stocks, and the plan is to initially manage it using the company's own funds, and later attract external investors once the investment performance is established.

This plan comes after the Nikkei Index experienced drastic fluctuations. On August 5th, the Nikkei Index plummeted by 12.4% in a single day, marking the largest drop since the 'Black Monday' of 1987, but the market quickly rebounded. This rebound was supported by both foreign inflows and economic recovery, demonstrating the strong underlying fundamentals of the market.

Currently, the Japanese government is encouraging people to convert more savings into investments in order to expand financial assets, which is crucial for a country with a severe aging population. Thanks to the active stock market and the newly introduced tax-free investment account, NISA, the net asset value of Japanese investment trusts reached a historical high at the end of June. However, these funds are currently mainly focused on foreign equities, with relatively little demand for investments in Japanese domestic stocks.

Noriyuki Sugihara believes that there are not many stock funds focused on large cap stocks in the current Japanese market. However, as policies push for increased shareholder value, an 'environment conducive to long-term investment in Japanese stocks that is favorable for asset accumulation' is taking shape.

The launch of this important new fund by AM-One demonstrates investors' confidence in the stability and growth potential of the Japanese market. The fund's focus on large cap stocks not only reflects a strategic use of recent active foreign investments and strong economic indicators, but also indicates a long-term bullish view of the Japanese economic fundamentals. The rapid recovery of the Japanese market from the significant early August decline demonstrates its inherent resilience and sustained investor trust in its long-term prospects.

At the same time, AM-One's move may further confirm the view that the Japanese stock market is undervalued. Over the past three years, with strengthened corporate governance and economic recovery, the Japanese stock market's performance in local currency has exceeded that of the US stock market. The launch of this new fund may rekindle the attention of global investors and provide impetus for further growth in the Japanese stock market.