In its interim results for H1 2023 published today (15 September), the trust reported that it had ranged between a 6% discount to a 3.5% premium over the last six months. The trust currently sits at a 2.8% discount, according to data from the Association of Investment Companies.
Meanwhile, its profits before tax jumped to £8.1m, compared to a £15.6m loss in the first half of 2022, leading its ordinary dividends per share to increase from 0.75p to 0.85p.
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The trust's net asset value increased 5% over the six months, compared to an MSCI Japan Small Cap fall of 0.4% in the same period. However, were it not for yen weakness over the period, AJOT's NAV would have returned 21.5% over the period.
Key contributors to the rise in NAV included TSI Holdings, Jade Group and Konishi, while detractors included Digital Garage, Pasona Group and SK Kaken. Throughout the six months, six positions were exited entirely and two new holdings were purchased.
Winterflood analysts noted the trust's focus remained on "investing in companies with solid fundamentals where there is an opportunity for active engagement".
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Joe Bauernfreund, portfolio manager of AVI Japan, said: "It feels that the stars are starting to align in Japan. Our approach to engaging with undervalued, high-quality companies is bearing fruit and, particularly if we see a reversal in yen weakness and increased flows into small caps, we could be in for a period of strong NAV growth."
Norman Crighton, chair of AVI Japan, added: "Japan has demonstrated it can produce strong returns on investments in 2023, and with the continued macroeconomic tailwinds, and potential for increased foreign allocation, it is an exciting time to be finding new opportunities in the region.
"Japan has demonstrated it can produce strong returns on investments in 2023, and with the continued macroeconomic tailwinds, and potential for increased foreign allocation, it is an exciting time to be finding new opportunities in the region."