World Gaining Faith in Japan as Topix Index Gets Cheaper

Japanese shares are getting cheaper faster than any developed market as global investors regain faith in the world’s third-largest economy, with valuations declining even as the benchmark Topix index rallies.

The price-earnings ratio for the nation’s companies dropped to 14.6 times estimated profits from 17.1 at the start of 2013 because the Topix’s 36 percent surge, the biggest among 24 developed countries tracked by Bloomberg, has failed to keep up with analyst forecasts for 60 percent income growth. Nowhere have valuations contracted faster than in Japan. Multiples have increased in the U.S., France and the U.K.