After a year in which Japanese stocks have climbed more than 50 per cent, investors might be forgiven for wanting to cash in their chips in a market that has often flattered to deceive. Certainly, from our perspective, it would appear that most investors are of the gloomy view that this strong run will be no different from the ephemeral bull markets (mayfly markets?) of the last 15 years.

So why do we think - to use the four most dangerous words in investment - this time is different

Although investors have focused on Prime Minister Shinzo Abe and his eponymous Abe-nomics, a policy mix that combines quantitative easing, fiscal stimulus and structural reform, we do not think these measures have greatly changed the case for Japan. The truth is the investment thesis for Japanese stocks was strengthening well before Abe came into office.

That’s not to say Abe hasn’t done some very positive things. His programme prudently focuses on ending deflation in the Japanese economy, and to a lesser extent introducing structural reform to promote continued growth. Indeed, he is to be praised for appointing Haruhiko Kuroda as governor of the Bank of Japan and Kikuo Iwata as his deputy. Under these two men the BoJ has implemented an aggressive strategy of monetary easing. What is more, Abe has also helped secure Japan a position in the negotiations for the Trans-Pacific Partnership free trade area.

But Abe has also been lucky enough to return to office at a time when Japan was already turning the corner.

His first piece of good fortune was that he became prime minister just as Masaaki Shirakawa’s tenure as BoJ governor was coming to an end, removing an obstacle to the adoption of the radical policy of "quantitative and qualitative easing" to end deflation.

Most importantly from an investor’s perspective, Abe’s electoral success coincided with a positive shift in the inflation landscape.

By the middle of 2012 we were beginning to see the first signs that the deflationary tide was ebbing: demand for bank lending was increasing; corporations were beginning to use their massive cash piles - equivalent to 30 per cent of GDP - to carry out M&A and investment; the decline in house prices was easing as mortgage lending started to edge up. Note that these are all indicators of demand - the problem of credit supply in Japan, or the reluctance of a broken banking system to intermediate, had been resolved years ago through a series of financial sector reforms.