Japan may be located on the other side of the globe, some 9,000 kilometres away from Germany, but in economic and demographic terms, the two countries are rather close.

A comparison of the two nation’s economies, in regards to growth, inflation and interest rates, suggests that Japan is undergoing developments today that Germany, too, will be facing in a few years’ time. We expect Germany to keep closing in on Japanese parameters over the coming decade. This will have significant ramifications for institutional investors and their investment policies and strategies. As it is, Japanese pension funds are already much more deeply committed to real assets than their German equivalents.

For roughly the past three decades, the economic development of Japan has been defined by low GDP growth, low-to-negative real interest rates and low inflation rates. The key reasons for this development are rooted in the demographics of the island nation, with its advanced ageing, low b