The trust has been one of the big winners from the economic reforms under prime minister Shinzo Abe, with returns among the highest in the open- and closed-ended sectors.
Numis analysts say that there is scope for returns to be boosted even further in the coming months by a reduction in the discount.
Numis’s Ewan Lovett-Turner said: "Historically, JP Morgan Japanese’s performance has been disappointing. However, this has gradually turned around under the management of Nicholas Weindling, who took over in late 2007. He focuses on quality companies in secular growth markets rather than 'old Japan'."
"We believe the fund is an attractive way to gain exposure to the recovery in Japanese equity markets and that the improved performance is yet to be fully recognised," he added.
"The trust is currently trading on a 9.5 per cent discount and we believe there is scope for a re-rating."
Oriel’s Tom Tuite Dalton said: "Since he took the helm, manager Nicholas Weindling has built up a solid track record with absolute performance spectacularly taking off from November last year when prime minister Shinzo Abe introduced his programme of QE and reform."
Data from FE Analytics shows that the trust has made 51.3 per cent in NAV terms over the past year while the TSE Topix benchmark has risen 35.91 per cent. In share price terms the trust has risen 60 per cent.
Performance of trust vs benchmark over 1yr
Source: FE Analytics
The only closed-ended fund to do better in NAV terms over this time is the Baillie Gifford Japan trust, which has made 64.9 per cent but is trading on a slight premium.
Only three out of 60 open-ended funds have done better: Neptune Japan Opportunities, Legg Mason Japan Equity and Invesco Perpetual Japan.
Source: FE Analytics
Tuite Dalton points out that as JP Morgan Japanese is the largest and most liquid London-listed fund investing in Japan, with a market cap of £389m, it has extra appeal.
He notes that the trust has done so well in recent months by deliberately investing in themes that are supported by Abenomics.
"Successful ongoing themes include internet-related companies such as Digital Garage, which invests in unlisted start-ups including the recently listed Twitter," he said.
"At the other end of the spectrum is Taiheiyo Cement, which performed well on the back of increased infrastructure investment under the LDP government."
"Real estate stocks such as Sumitomo Realty have also helped performance. Ongoing QE in Japan has led to JFJ [JP Morgan Japanese] being overweight in financials, as investors are forced up the risk curve to avoid having their spending power eroded, while anticipated future wage growth has made Weindling optimistic about retailers."
Hargreaves Lansdown’s Adrian Lowcock says that it makes sense to invest in Japan at this time.
The stability that comes from a prime minister with a solid majority and a central bank that is supportive of his policy should boost Japanese stocks, he says.
Meanwhile, Japanese shares look good value on a price/book of 1.32, significantly lower than other markets – many companies are trading below book, he points out.
Japan is also introducing its own ISA, which should encourage domestic investors into equities, while plans to raise the sales tax from 5 per cent to 8 per cent should help pull the country out of deflation by pulling forward spending.
"Shinzo Abe has a unique opportunity to get Japan back on the right track," Lowcock said. "He has three years to implement his structural policy and make changes that will have long-term effects on Japan's economic growth."
"He has the backing of his party, control of both houses of parliament and support of the governor of the Bank of Japan."
"Even after their recent strong rally, Japanese shares still look good value to me – granted it is not a one-way bet, it does still have risks."
"But add the positive outlook for Japan over the next three years and I believe now is a good time to invest in Japan."
Lowcock favours the open-ended Schroder Tokyo fund, although it has lagged the market for much of the past year, returning 30.47 per cent.
Performance of trust vs sector and index over 1yr
Source: FE Analytics
It does have a very good long-term record, though, with first-quartile returns over three and 10 years. The fund has ongoing charges of 1.67 per cent.
Weindling has run JP Morgan Japanese since December 2007. Our data shows that over the past five years it has made 71 per cent in NAV terms.
While this is lower than the other three Japan trusts, it is significantly higher than the 59.73 per cent returned by the Topix. In share price terms it has made 97.14 per cent, well ahead of Schroder Tokyo and the average IMA Japan fund.
Performance of trust vs sectors and benchmark over 5yrs
Source: FE Analytics
The trust has ongoing charges of 0.76 per cent.
