Fidelity Japan Trust Regulatory News (FJV)

FIDELITY JAPAN TRUST PLC

Half-Yearly Results for the six months ended 30 June 2023 (unaudited)

Financial Highlights:

valuations.

Contacts

For further information, please contact:

Smita Amin

Company Secretary

01737 836347

FIL Investments International

Chairman’s Statement

After such a challenging year for the Japanese stock market in 2022, it is heartening to see something of a recovery in the first half of 2023. The TOPIX Total Return Index, the Japanese market index, rose by 22.7% in yen terms over the six months to 30 June 2023. However, over the same period, the yen weakened by 13.6% against sterling due to the continued wide divergence in interest rates between Japan and the UK. As a result, the return of the TOPIX Total Return Index (in sterling terms), the Company’s Reference Index, was just 6.0%. Compared to this, the net asset value of Fidelity Japan Trust PLC marginally underperformed with a rise of 5.3%. The share price of the Company rose by 3.8% over the same period, reflecting a widening in the discount at which the shares of the Company trade from 9.6% to 10.9%.

A fuller commentary on both the portfolio and Japanese economy may be found in the Portfolio Manager’s Review below.

DISCOUNT MANAGEMENT, SHARE REPURCHASES AND TREASURY SHARESThe Board has an active discount management policy, the primary purpose of which is to reduce discount volatility. The Board’s intention is to aim to manage the discount so that it remains in single digits in normal market conditions. However, at this reporting period end, markets were particularly volatile, and discounts have been wide across the entire investment companies sector. This is particularly frustrating given the stronger performance of the Company relative to other Japanese investment companies.

As part of the discount management policy, 587,834 ordinary shares were repurchased for holding in Treasury in the review period at a cost of £1,029,000. This represents 0.4% of the issued share capital. Since the period end and up to the date of this report, a further 717,834 ordinary shares have been repurchased at a cost of £1,244,000.

GearingThe Company continues to gear the portfolio through the use of long Contracts for Difference (CFDs). The Board continues to believe that gearing is a distinct advantage of the investment trust structure and will benefit the performance of the Company as the market recovers. The Board maintains that using CFDs provides more flexibility and at a lower cost than traditional bank debt.

The Portfolio Manager has the discretion to be up to 25% geared. Total portfolio exposure at the end period end was £304.8m, equating to gearing of 23.0% compared with 20.8% at the end of 2022. As at 27 July 2023, gearing was 23.8%.

Unlisted CompaniesThe Company is permitted to invest up to 20% of the Company’s net assets in unlisted companies. The valuation of each unlisted investment is set by the Manager’s Fair Value Committee and includes input from the analysts covering the securities, Fidelity’s unlisted specialist and also advised upon by independent third party valuers, Kroll. Given the volatile market environment, the investment team has been cautious about committing additional capital to this market segment and no new unlisted investments have been added to the Company’s portfolio during the reporting period. One stock has been sold. The value of unlisted investments was 6.3% of net assets at the period end compared to 8.0% as at 31 December 2022.

Due Diligence Trip 2023The Board visited Japan in June 2023, meeting with the Fidelity investment team, a number of Fidelity analysts and senior management as well as some external market commentators and senior management of Companies held in the Fidelity Japan Trust PLC portfolio. The trip gave us reassurance about the depth of resources supporting Nicholas Price, the Portfolio Manager, and the investment team and further confidence that the management of Fidelity Japan Trust PLC is in good hands.

Board ChangesThe Board continues to review its composition and effectiveness as well as considering appropriate succession planning. Dominic Ziegler will complete his nine-year tenure on the Board in November this year and will step down from the Board at the conclusion of the Annual General Meeting in May 2024. The Board will conduct a recruitment exercise to find his replacement in the next few months.

OutlookJapan currently has the presidency of the G7 group of developed economies, and the Hiroshima Summit in May allowed the country to showcase its position as an increasingly entrepreneurial culture at the centre of Asia. Moves to tackle the bureaucratic nature of some of Japan’s corporates, which began under the late Prime Minister Shinzo Abe, have built up steam under current leader Fumio Kishida, with the Tokyo Stock Exchange setting out an agenda for a more shareholder-focused approach. This is starting to feed into an increased pace of share buybacks by major companies, more diverse boards of directors, and an emerging venture capital ecosystem where companies pushing into new markets and industries could become the stock market stars of the future. With many listed Japanese companies having built up significant excess cash – sometimes as much as 20-30% of their market capitalisation – during the long years of deflation, we believe the deployment of this cash could have a meaningful impact on the relative performance of Japan versus other markets in the months and years ahead. These factors and the lower valuation of Japanese stocks relative to other markets have all helped to garner significant interest from international investors which should result in a further rise in the Japanese stock market during the second half of 2023. A further boost to the returns of the Company will also come if the yen was to strengthen and if there is a narrowing of the discount of the share price relative to the net asset value of the Company.

David GrahamChairman31 July 2023

Portfolio Manager’s Review

Market reviewThe Japanese equity market climbed to a multi-decade high during the period, registering its strongest first-half performance since the advent of Abenomics. Extended buying by overseas investors drove share price gains, though market breadth was limited, and returns were concentrated in large-cap stocks.

Market participants were encouraged by a steady stream of corporate governance related developments, spurred by reform measures from the Tokyo Stock Exchange, and a largely positive domestic earnings season. The Bank of Japan’s (BoJ) dovish policy stance and a weaker yen also supported the positive trend in share prices. Japan’s currency came under broad-based pressure amid renewed monetary policy divergence, breaking through the ¥183 level against the pound for the first time since late 2015.

Value stocks outperformed over the period, led by large-cap names across the Wholesale Trade, Iron & Steel, Machinery and Electric Appliances sectors. Trading companies (a highly publicised target of Berkshire Hathaway) and semiconductor-related firms were among the strongest performers. Conversely, domestic and defensive industries underperformed the broader market, and small-cap growth stocks were conspicuous laggards.

On the macroeconomic front, the Japanese economy accelerated over the January–March quarter, with real GDP coming in at +2.7% annualised. This compared with consensus forecasts of +1.9%. Domestic demand gained momentum as the country’s delayed reopening supported growth in consumption and capital investment. While exports slowed sharply, inbound consumption provided a tailwind for the economy and retail sales rose sharply in May. Core consumer inflation remained well above the BoJ’s 2% target, with its version of the core-core Consumer Price Index (CPI), which excludes energy and fresh food, coming in at +4.3% in May. This fuelled speculation that the central bank will positively revise its inflation forecasts in its next quarterly outlook report.

Portfolio reviewIn the six months to 30 June 2023, the Company’s net asset value (NAV) increased by 5.3% in sterling terms, marginally underperforming the Reference Index, which returned 6.0%. The share price return was 3.8% in the same period, the result of the discount of the share price to net asset value widening to 10.9% from 9.6% at the start of the period.

The 13.6% fall in the value of the yen against the pound since the end of last year weighed on the sterling-based returns of the Company’s NAV, its share price and the Reference Index. This stems largely from the widening policy divergence between the BoJ and the Bank of England.

The position in Nihon M&A Center, Japan’s largest provider of merger and acquisition (M&A) advisory services for small and medium enterprises (SMEs), was the most significant detractor from performance over the review period. At the beginning of the year, the company’s quarterly results came in far below market expectations due to a deterioration in sales and weaker pricing of M&A deals. At the same time, a new innovative competitor, M&A Research Institute, delivered stronger than expected earnings across all metrics, reflecting its superior productivity. While the SME M&A market as a whole remains robust, centred on business succession demand, company specific factors drove our decision to reduce the exposure to Nihon M&A Center and initiate a position in M&A Research Institute.

In the Wholesale Trade sector the holding in MISUMI Group, a leading supplier of factory automation and machinery parts, underperformed. The company reported modest growth in monthly sales data, which raised concerns about the strength of underlying capital expenditure demand. However, the company had already indicated flat sales in the first half of fiscal 2023, and we expect a recovery in the order cycle to take hold from the second half of the year.

In the Information & Communication sector, Raksul, a leading business-to-business (B2B) platform that provides online printing and marketing/sales support services, faced selling pressure. The stock performed well in the second half of 2022, supported by positive earnings results and improved shareholder returns, but succumbed to profit taking in early 2023 as the market rotated in favour of technology-related cyclicals. We remain confident in its core printing business, which is recovering strongly as the effects of the COVID-19 outbreak recede and the number of registered users continues to grow. We also see the potential for horizontal growth in the logistics industry.

Elsewhere, Ryohin Keikaku, operator of the Muji brand of general merchandise stores, struggled in the first half of fiscal 2022 (12 months to August 2023) and lowered its full-year guidance. Rising procurement costs, exacerbated by a weak yen and high raw material prices, led to a profit shortfall at its domestic business. Conversely, the company’s overseas operations generated revenue and profit growth that exceeded its expectations. Looking ahead, we expect to see a cyclical recovery in profits, supported by the diminishing impact of lockdowns in China and improving margins in Japan.

On a positive note, holdings in semiconductor-related companies were among the key contributors to performance over the period. Shares in semiconductor production equipment (SPE) maker Tokyo Electron rebounded strongly as the market shifted its focus from earnings downside this year to a recovery from 2024. Tokyo Electron is a highly competitive player in a structural growth market, supported by sustained semiconductor demand, technological advances in chip making and government support amid rising geopolitical tensions. Meanwhile, fabless semiconductor manufacturer Socionext reported strong full-year results that exceeded street estimates, driven by automotive-related orders in the US and data centre/network sales in China. Furthermore, development efficiency gains contributed to an improvement in margins.

Elsewhere, the position in Tsuburaya Fields Holdings, a digital content and game machine company, ranked among the standout contributors to performance. It reported significant increases in quarterly sales and profits, fuelled by the strong performance of its PS (Pachislot) game machine business, as well as the growing popularity of its Ultraman character at home and abroad. Against this backdrop, the company raised its full-year earnings and dividend guidance. We expect the core of its content and digital business, Tsuburaya Productions, to contribute significantly to future earnings as its Ultraman franchise gains popularity overseas.

Portfolio positioningThere has been no significant change in terms of sector level positioning. The Company remains overweight in the Chemicals, Services and Retail sectors. At the opposite end of the scale, Transportation Equipment and Banks remain underweight. There was a moderate increase in the level of gearing over the six months to 23% from 21% which was, as always, dependent on bottom-up conviction in the available investment opportunities and accompanying valuations.

As a result of bottom-up stock selection, there has been an increase in the active exposure to the Electric Appliances sector. Electronic component makers have had to deal with a prolonged inventory correction due to a slow recovery in automobile production and weak final demand for consumer electronics. However, there are signs that demand is bottoming out and operating rates are gradually rebounding. We added further weight to long-standing secular growth names Keyence (factory automation sensors) and Mitsui High-tec (motor cores for electric vehicles) following a year of quite significant underperformance in 2022. Meanwhile, we increased the exposure to electronic components maker Taiyo Yuden, a leading producer of high-end ceramic capacitors for automotive and smartphone applications.

Examples of under researched small caps that have increased in prominence within the portfolio this year (and which our Board members met during their recent due diligence trip to Japan) include Kosaido Holdings and Osaka Soda. Kosaido Holdings is the dominant provider of crematorium services in Tokyo, where high costs and local opposition to new facilities create barriers to entry and where demographic trends support stable trend growth. The company’s efforts to expand capacity and maximise its existing crematorium facilities to provide funeral services are supportive of future earnings growth. Osaka Soda is transforming from a basic chemicals company to a supplier of value-added functional and healthcare materials. It is the monopoly supplier of high-grade silica gel, a high-margin purification material for diabetes drugs. As the prevalence of diabetes continues to increase globally, Osaka Soda is expanding production capacity to meet the rising demand from major pharmaceuticals companies.

On the other hand, we sold positions in Rinnai, a producer of high-quality home gas appliances that is experiencing headwinds from housing/real estate markets overseas, and Shimadzu, a manufacturer of analytical and measuring equipment that is facing rising development and personnel costs. We also took some profits in strong performers such as Tokyo Electron and Tsuburaya Fields and recycled the proceeds into new names.

At the end of the review period, six unlisted names were held representing 6.3% of the portfolio. The Company’s shares in Innophys, a developer of exoskeleton support suits, were redeemed via a repurchase plan executed at the end of March. The company failed to fully execute on its business plan for wearable muscle suits sales and given the uncertain outlook for the market and competitive landscape, we first wrote down the asset and then exited in a trade sale to a corporate. We continue to evaluate new opportunities, while maintaining a disciplined approach on further investments.

Sustainability and engagementIn the first six months of 2023, the sustainable investing team in Tokyo, led by our Head of Engagement, conducted 59 engagement meetings (in addition to our fundamental research meetings), covering 20 names held by the Company. Themes that formed part of these environmental, social and corporate governance (ESG) engagements include long-term strategy and capital allocation, climate change and environmental issues, and human resource development and gender diversity.

The January–March period, which constitutes the final three months of the Japanese fiscal year, was a busy period as both corporates and regulators pushed out initiatives before the end of the year. Notably, reform efforts to boost capital efficiency in Japan’s stock market started to gain traction. From the first quarter of this year, the Tokyo Stock Exchange (TSE) requires most listed firms, especially those trading below book value, to “properly identify” their cost and efficiency of capital.

We are optimistic that this initiative to tackle companies’ tendency to de-prioritise cost of equity and returns on invested capital will foster a permanent change in corporate mentality and create value for shareholders. This is a matter we have been vocal about given the disproportionately high number of companies that trade below 1.0x price-to-book ratio on the Japanese equity market. We are wary of the initiative resulting in a flurry of one-off share buybacks, so we will be monitoring company responses as well as the TSE’s commitment to follow through.

OutlookJapan’s delayed reopening and the return of inbound tourists are driving growth in consumption and services demand. At the same time, the economy is transitioning to a moderately inflationary state, as companies are finding it easier to raise prices and are increasing wages. There is growing pressure on firms to enhance their corporate value and utilise excess cash to fund growth investments and shareholder returns. While signs of weakness in China’s recovery and the risk of a US recession represent potential headwinds that could prompt a near-term adjustment, this accumulation of positive factors is supportive of the mid-to-long term outlook for the Japanese market.

NICHOLAS PRICEPortfolio Manager31 July 2023

TWENTY LARGEST HOLDINGS AS AT 30 JUNE 2023

The Portfolio Exposures shown below measure exposure to market price movements as a result of owning shares and derivative instruments. The Fair Value is the actual value of the portfolio and is the value shown on the Balance Sheet. Where a Contract for Difference (CFD) is held, the Fair Value reflects the profit or loss on the contract since it was opened and is based on how much the share price of the underlying share has moved. Where the Company only holds shares, the Fair Value and the Portfolio Exposure will be the same.

Fair Value and Portfolio Exposure of Investments as at 30 June 2023

1 Portfolio Exposure is expressed as a percentage of Shareholders’ Funds.

2 Gearing is the amount by which the Portfolio Exposure exceeds Shareholders’ Funds expressed as a percentage of Shareholders’ Funds.

Interim Management Report and Directors’ Responsibility Statement

Principal Risks and UncertaintiesThe Board, with the assistance of the Manager (FIL Investment Services (UK) Limited), has developed a risk matrix which, as part of the risk management and internal controls process, identifies the key existing and emerging risks and uncertainties faced by the Company.

The Board considers that the principal risks and uncertainties faced by the Company continue to fall into the following categories: geopolitical risk; natural disaster risk; market, economic and currency risks; investment performance and gearing risks; discount control and demand risks; key person risk; operational resilience risk; environmental, social and governance (ESG) risks; cybercrime risk; and tax and regulatory risks. Information on each of these risks is given in the Strategic Report section of the Annual Report for the year ended 31 December 2022. A copy of the Annual Report can be found on the Company’s pages of the Manager’s website at www.fidelity.co.uk/japan.

While the principal risks and uncertainties are the same as those at the previous year end, the uncertainty continues to be heightened by geopolitical and economic and market events, including the ongoing Russia and Ukraine conflict, continued trade tensions between the US and China and the potential for North Korean aggression. The Board remains vigilant in monitoring such risks.

Climate change continues to be a key emerging issue, as well as a principal risk, that is confronting asset managers and their investors. The Board notes that the Manager has integrated ESG considerations, including climate change, into the Company’s investment process. The Board will continue to monitor how this may potentially impact the Company, the main risk being the impact on investment valuations and shareholder returns.

Investors should be prepared for market fluctuations and remember that holding shares in the Company should be considered to be a long-term investment. Risks are mitigated by the investment trust structure of the Company which means that no forced sales need to take place to deal with any redemptions. Therefore, investments in the Company’s portfolio can be held over a longer-time horizon.

The Manager has appropriate business continuity and operational plans in place to ensure the uninterrupted provision of services, including investment team key activities, including those of portfolio managers, analysts and trading/support functions. It reviews its operational resilience strategies on an ongoing basis and continues to take all reasonable steps in meeting its regulatory obligations, the ability to continue operating and the steps it needs to take to serve and support its clients, including the Board.

The Company’s other third-party service providers also have similar measures to ensure that business disruption is kept to a minimum.

Transactions with the Manager and Related PartiesThe Manager has delegated the Company’s portfolio management and company secretariat services to FIL Investments International. Transactions with the Manager and related party transactions with the Directors are disclosed in Note 12 to the Financial Statements below.

Going Concern StatementThe Directors have considered the Company’s investment objective, risk management policies, liquidity risk, credit risk, capital management policies and procedures, the nature of its portfolio and its expenditure and cash flow projections. The Directors, having considered the liquidity of the Company’s portfolio of investments (being mainly securities which are readily realisable) and the projected income and expenditure, are satisfied that the Company is financially sound and has adequate resources to meet all of its liabilities and ongoing expenses and can continue in operational existence for a period of at least twelve months from the date of this Half-Yearly Report.

This conclusion also takes into account the Board’s assessment of the ongoing risks from the war in Ukraine, significant market events and regulatory changes.

Accordingly, the Financial Statements of the Company have been prepared on a going concern basis.

Continuation votes are held every three years and the next continuation vote will be put to shareholders at the Annual General Meeting in 2025.

By Order of the BoardFIL Investments International31 July 2023

Directors’ Responsibility StatementThe Disclosure and Transparency Rules (DTR) of the UK Listing Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Interim Management Report and Financial Statements.

The Directors confirm to the best of their knowledge that:

In line with previous years, the Half-Yearly Report has not been audited or reviewed by the Company’s Independent Auditor.

The Half-Yearly Report was approved by the Board on 31 July 2023 and the above responsibility statement was signed on its behalf by David Graham, Chairman.

Financial Statements

Income Statement for the six months ended 30 June 2023

The Company does not have any other comprehensive income. Accordingly the net return/(loss) on ordinary activities after taxation for the period is also the total comprehensive income for the period and no separate Statement of Comprehensive Income has been presented.

The total column of this statement represents the Income Statement of the Company. The revenue and capital columns are supplementary and presented for information purposes as recommended by the Statement of Recommended Practice issued by the AIC.

No operations were acquired or discontinued in the period and all items in the above statement derive from continuing operations.

Statement of Changes in Equity for the six months ended 30 June 2023

Balance Sheet as at 30 June 2023Company Number 2885584

Notes to the Financial Statements

1 Principal ActivityFidelity Japan Trust PLC is an Investment Company incorporated in England and Wales with a premium listing on the London Stock Exchange. The Company’s registration number is 2885584, and its registered office is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey KT20 6RP. The Company has been approved by HM Revenue & Customs as an Investment Trust under Section 1158 of the Corporation Tax Act 2010 and intends to conduct its affairs so as to continue to be approved.

2 Publication of Non-statutory AccountsThe Financial Statements in this Half-Yearly Report have not been audited by the Company’s Independent Auditor and do not constitute statutory accounts as defined in section 434 of the Companies Act 2006 (the Act). The financial information for the year ended 31 December 2022 is extracted from the latest published Financial Statements of the Company. Those Financial Statements were delivered to the Registrar of Companies and included the Independent Auditor’s Report which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Act.

3 ACCOUNTING POLICIES(i) Basis of PreparationThe Company has prepared its Financial Statements on a going concern basis and in accordance with UK Generally Accepted Accounting Practice (UK GAAP) and FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland, issued by the Financial Reporting Council. The Financial Statements are also prepared in accordance with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies and Venture Capital Trusts (SORP) issued by the Association of Investment Companies (AIC) in July 2022. FRS 104: Interim Financial Reporting has also been applied in preparing this condensed set of Financial Statements. The accounting policies followed are consistent with those disclosed in the Company’s Annual Report and Financial Statements for the year ended 31 December 2022.

(ii) Going ConcernThe Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for a period of at least twelve months from the date of approval of these Financial Statements. Accordingly, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing these Financial Statements. This conclusion also takes into account the Directors’ assessment of the risks faced by the Company as detailed in the Interim Management Report above.

4 Income

No special dividends have been recognised in capital during the period (six months ended 30 June 2022: £42,000 and year ended 31 December 2022: £47,000).

5 Investment Management Fees

1 For the calculation of the variable management fee element, the Company’s NAV return was compared to the Reference Index return on a daily basis. The period used to assess the performance was from 1 July 2018 until a three year history was established. Since 1 July 2021, the performance period is on a rolling three year basis.

FIL Investment Services (UK) Limited is the Company’s Alternative Investment Fund Manager and has delegated portfolio management to FIL Investments International (FII). Both companies are Fidelity group companies.

FII charges base investment management fees at an annual rate of 0.70% of net assets. In addition, there is a +/- 0.20% variation fee based on performance relative to the Reference Index over a three year rolling period. Fees are payable monthly in arrears and are calculated on a daily basis.

The base investment management fees have been allocated 80% to capital reserve in accordance with the Company’s accounting policies.

6 Finance Costs

1 Due to negative interest rates during the reporting period, the Company paid interest on its collateral and deposits.

Finance costs have been allocated 80% to capital reserve in accordance with the Company’s accounting policies.

7 Taxation on Return/(Loss) on Ordinary Activities

8 Return/(Loss) per Ordinary Share

The return/(loss) per ordinary share is based on the net return/(loss) on ordinary activities after taxation for the period divided by the weighted average number of ordinary shares held outside of Treasury during the period, as shown below:

9 Fair Value HierarchyThe Company is required to disclose the fair value hierarchy that classifies its financial instruments measured at fair value at one of three levels, according to the relative reliability of the inputs used to estimate the fair values.

Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset. The valuation techniques used by the Company are as disclosed in the Company’s Annual Report for the year ended 31 December 2022 (Accounting Policies Notes 2 (j) and 2 (k) on pages 63 and 64). The table below sets out the Company’s fair value hierarchy:

1 The shares held by the Company in Innophys were redeemed in the reporting period via a repurchase plan.

10 Share Capital

1 Ordinary shares held in Treasury carry no rights to vote, to receive a dividend or to participate in a winding up of the Company.

The Company repurchased 587,834 ordinary shares (year ended 31 December 2022: 175,001 shares and six months ended 30 June 2022: 50,000 shares) and held them in Treasury. The £1,029,000 (year ended 31 December 2022: £284,000 and six months ended 30 June 2022: £77,000) cost of repurchase was charged to the other reserve.

11 Net Asset Value per Ordinary ShareThe calculation of the net asset value per ordinary share is based on the total Shareholders’ funds divided by the number of ordinary shares held outside of Treasury.

It is the Company’s policy that shares held in Treasury will only be reissued at net asset value per ordinary share or at a premium to net asset value per ordinary share and, therefore, shares held in Treasury have no dilutive effect.

12 Transactions with the Manager and Related PartiesFIL Investment Services (UK) Limited is the Company’s Alternative Investment Fund Manager and has delegated the portfolio management and the role of company secretary to FIL Investments International (FII), the Investment Manager. Both companies are Fidelity group companies. Details of the fee arrangements are given in Note 5 above.

During the period, fees for portfolio management services of £752,000 (six months ended 30 June 2022: £892,000 and year ended 31 December 2022: £1,598,000) and secretarial and administration fees of £25,000 (six months ended 30 June 2022: £25,000 and year ended 31 December 2022: £50,000) were payable to FII. At the Balance Sheet date, fees for portfolio management services of £104,000 (31 December 2022: £102,000 and 30 June 2022: £104,000) and secretarial and administration fees of £13,000 (31 December 2022: £13,000 and 30 June 2022: £13,000) were accrued and included in other creditors. FII also provides the Company with marketing services. The total amount payable for these services during the period was £101,000 (six months ended 30 June 2022: £77,000 and year ended 31 December 2022: £177,000). At the Balance Sheet date, fees for marketing services of £nil (31 December 2022: £39,000 and 30 June 2022: £15,000) were accrued and included in other creditors.

As at 30 June 2023, the Board consisted of five non-executive Directors (shown in the Directory in the Half-Yearly Report), all of whom are considered to be independent by the Board. None of the Directors have a service contract with the Company. The Chairman receives an annual fee of £40,000, the Audit Committee Chairman an annual fee of £33,000 and each other Director an annual fee of £29,000. The following members of the Board hold ordinary shares in the Company: David Graham 78,489 shares, Sarah MacAulay 181,340 shares, Myra Chan nil shares, David Barron 19,366 shares and Dominic Ziegler 24,045 shares.

The financial information contained in this Half-Yearly Results Announcement does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the six months ended 30 June 2023 and 30 June 2022 has not been audited or reviewed by the Company’s Independent Auditor.

The information for the year ended 31 December 2022 has been extracted from the latest published audited financial statements, which have been filed with the Registrar of Companies, unless otherwise stated. The report of the Auditor on those financial statements contained no qualification or statement under sections 498(2) or (3) of the Companies Act 2006.

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

A copy of the Half-Yearly Report will shortly be submitted to the National Storage Mechanism and will be available for inspection at www.morningstar.co.uk/uk/NSM

The Half-Yearly Report will also be available on the Company's website at www.fidelity.co.uk/japan where up to date information on the Company, including daily NAV and share prices, factsheets and other information can also be found.