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Preliminary Announcement - Half-yearly Report

Released 14:44 31-Jul-2014

Preliminary Announcement - Half-yearly Report

Fidelity Japanese Values PLC

Preliminary announcement of unaudited Half-Yearly results for the six months
ended 30 June 2014

Contents

Directors Reports                                                              
                                                                               
Investment Objective and Performance Highlights                               1
                                                                               
Financial Summary                                                             2
                                                                               
Chairman's Statement                                                          3
                                                                               
Manager's Half-Yearly Review                                                  5
                                                                               
Twenty Largest Investments                                                    8
                                                                               
Interim Management Report                                                      
                                                                               
Principal Risks and Uncertainties                                            10
                                                                               
Related Party Transactions                                                   10
                                                                               
Going Concern                                                                10
                                                                               
Directors' Responsibility Statement                                          10
                                                                               
Financial Statements                                                           
                                                                               
Income Statement                                                             12
                                                                               
Reconciliation of Movements in Shareholders' Funds                           14
                                                                               
Balance Sheet                                                                16
                                                                               
Cash Flow Statement                                                          17
                                                                               
Notes to the Financial Statements                                            18
                                                                               
Information for Shareholders                                                   
                                                                               
Shareholder Information                                                      22
                                                                               
Glossary of Terms                                                            24
                                                                               
Investor Information                                                         27
                                                                               
Warning to Shareholders                                                      28

Investment Objective and Performance Highlights

The investment objective of the Company is to achieve long term capital growth
from an actively managed portfolio of securities primarily of small and medium
sized Japanese companies listed or traded on Japanese stock markets.

Performance - Total Return (six months to 30 June 2014)

                                                                           Six 
                                                                        months 
                                                                            to 
                                                                            30 
                                                                          June 
                                                                          2014 
                                                                               
Net Asset Value ("NAV") per Ordinary Share                               +4.2% 
                                                                               
Ordinary Share Price                                                     +3.5% 
                                                                               
Russell Nomura Mid/Small Cap Index* (in sterling                         +0.9% 
terms)                                                                         

* The Company's Reference Index

As at 30 June 2014

                                                                            As 
                                                                            at 
                                                                            30 
                                                                          June 
                                                                          2014 
                                                                               
Equity Shareholders' Funds                                              £93.8m 
                                                                               
Market Capitalisation                                                   £84.9m 
                                                                               
Capital Structure: Ordinary Shares of 25p each                     113,954,834 

Standardised Performance - Total Return (%)

                              01/07/13  01/07/12  01/07/11  01/07/10  01/07/09 
                                 to        to        to        to        to    
                              30/06/14  30/06/13  30/06/12  30/06/11  30/06/10 
                                                                               
NAV per ordinary share          +1.0      +29.2     -9.9      +16.9     +16.0  
                                                                               
Ordinary share price            +3.1      +37.6     -9.5      +14.9     +11.6  
                                                                               
Russell Nomura Mid/Small Cap    +0.1      +20.5     -5.7      +3.4      +10.9  
Index (in sterling terms)                                                      

Sources: Fidelity and Datastream

Past performance is not a guide to future returns

The Company is a member of the Association of Investment Companies

Financial Summary

                                                  30           31            % 
                                                June     December       change 
                                                2014         2013              
                                                                               
Assets                                                                         
                                                                               
Total portfolio exposure1                    £108.8m      £105.1m         +3.5 
                                                                               
Shareholders' funds                           £93.8m       £90.0m         +4.2 
                                                                               
Total portfolio exposure in                    16.0%        16.8%              
excess of shareholders'                                                        
funds (gearing)                                                                
                                                                               
NAV per ordinary share                        82.32p       79.02p         +4.2 
                                                                               
Stockmarket data                                                               
                                                                               
Russell Nomura Mid/Small                      2.1748       2.1562         +0.9 
Cap Index (in sterling                                                         
terms)                                                                         
                                                                               
Yen/£ exchange rate                          173.216      174.080         +0.5 
                                                                               
Ordinary share price2        period end       74.50p       72.00p         +3.5 
                                                                               
                            period high       75.75p       80.38p              
                                                                               
                             period low       65.25p       50.50p              
                                                                               
Discount                     period end         9.5%         8.9%              
                                                                               
                            period high        14.3%        19.9%              
                                                                               
                             period low         2.8%         4.7%              
                                                                               
                                                 Six          Six              
                                              months       months              
                                               ended        ended              
                                                  30           30              
                                                June         June              
                                                2014         2013              
                                                                               
Results - see pages 12 and                                                     
13                                                                             
                                                                               
Revenue loss per ordinary                     (0.07p)      (0.09p)             
share                                                                          
                                                                               
Capital return per ordinary                    3.38p       23.61p              
share                                                                          
                                                                               
Total return per ordinary                      3.31p       23.52p              
share                                                                          

1 The total exposure of the investment portfolio, including exposure to the
investments underlying the long CFDs

2 The period high and low figures relate to the six months to 30 June 2014 and
the year to 31 December 2013

Sources: Fidelity and Datastream

Past performance is not a guide to future returns

Chairman's Statement

I have pleasure in presenting the Half-Yearly Report for the six months ended
30 June 2014.

During the period under review, the Company's net asset value ("NAV") per share
rose by 4.2%, compared to an increase of 0.9% in the Russell Nomura Mid/Small
Cap Index (sterling adjusted). Over the same period the share price rose by
3.5%, resulting in a widening of the discount from 8.9% to 9.5%.

As can be seen from the Attribution Analysis opposite, Index performance, stock
selection and gearing all contributed to performance. Furthermore, the yen's
appreciation against sterling had a positive impact.

A commentary on both the portfolio and the prospects for the Japanese economy
may be found in the Manager's Half-Yearly Review on pages 5 to 7.

GEARING

The Company continues to gear through the use of Contracts For Difference
("CFDs"). Total portfolio exposure was £108.8m as at 30 June 2014, equating to
gearing of 16.0% (see page 9).

SHARE REPURCHASES

No ordinary shares were repurchased for cancellation in the six months to 30
June 2014 and none have been repurchased since the period end and the date of
this report.

Attribution Analysis                                                       Six 
                                                                        months 
                                                                            to 
                                                                            30 
                                                                          June 
                                                                          2014 
                                                                       (pence) 
                                                                               
NAV per share at 31 December 2013                                        79.02 
                                                                               
Impact of the Index (in yen terms)                                       +0.28 
                                                                               
Impact of Index Income (in yen terms)                                    +0.81 
                                                                               
Impact of Stock Selection (relative to the Index)                        +1.99 
                                                                               
Impact of Gearing                                                        +0.43 
                                                                               
Impact of Exchange Rate                                                  +0.40 
                                                                               
Impact of Charges                                                        -0.69 
                                                                               
Impact of Cash                                                           +0.08 
                                                                               
NAV per share at 30 June 2014                                            82.32 

SUBSCRIPTION SHARES

Shareholders will have recently received notice to attend a General Meeting on
26 August 2014. This meeting will seek approval for a Bonus Issue of one
subscription share for every five ordinary shares held by qualifying
shareholders; together with the adoption of new Articles of Association for the
Company. Each subscription share gives the holder the right, but not the
obligation, to subscribe for one ordinary share at the end of each month from
the end of September 2014 until the end of April 2016 inclusive. Each
subscription share may only be exercised once. If approved, the exercise price
will be based on the Company's NAV at 5pm on 26 August 2014, plus a 2% premium
to such NAV, rounded up to the nearest quarter of a penny. The subscription
shares will be listed on the London Stock Exchange and dealings will commence
in these shares at 8.00 a.m. on 28 August 2014.

REGULATORY MATTERS

As stated in the Annual Report, the Board has worked with its advisors in order
to achieve compliance with the Alternative Investment Fund Managers Directive
("AIFMD") which came into force on 22 July 2014. As a result the Board has
appointed FIL Investment Services (UK) Limited (a Fidelity group company) to
act as the Company's Alternative Investment Fund Manager. FIL Investment
Services (UK) Limited has delegated the portfolio management to FIL Investments
International who previously acted as the Company's Manager. FIL Investments
International will continue to act as Company Secretary.

An additional requirement of the AIFMD was to appoint a depositary on behalf of
the Company to oversee the custody and cash arrangements of the Company. The
Company has now appointed J.P.Morgan Europe Limited to act as the Company's
Depositary. J.P.Morgan Europe Limited is part of the same group of companies as
JP Morgan Chase Bank who act as the Company's current banker and custodian and
will continue to do so.

OUTLOOK

The performance of Japanese stocks has started to improve as risk aversion has
eased. Global growth is picking up and there are some signs that activity will
accelerate in the coming months, led by the US. The Japanese economy is
gradually recovering from the effects of April's sales tax increase and
Government-led reform measures are proving to be positive from an equity
perspective. Meanwhile, the improvement in corporate earnings is set to
reaccelerate and valuation multiples are undemanding compared with other major
markets.

Of all the positive developments in recent months, we find it most encouraging
that Japanese companies are increasingly shareholder friendly, as evidenced by
the recent increase in share buybacks and raised dividends. Following the
announcement of Japan's Stewardship Code, with which 127 institutional
investors have complied, the Government is aiming to introduce a new "corporate
governance code" next year. This is expected further to enforce best practice
in governance by companies, whilst the Stewardship Code is limited to putting
external pressure on companies through dialogue with investors to promote
sustainable growth and increased dividends.

None of the Government-led reforms are happening quickly, but there is, at
least, some movement and recent developments are somewhat encouraging.

We believe that the fundamental direction of the "New Growth Strategy"
published in June 2014 is positive and that domestic macroeconomic fundamentals
will continue to show improvement, if only gradual.

David Robins

Chairman

31 July 2014

Manager's Half-Yearly Review

During the first four months of 2014, global equity markets struggled and Japan
was a relative laggard. This was largely due to external factors, such as
concerns about China's economy and escalating geopolitical issues. As emerging
markets were sold off and global risk appetite diminished, the yen
strengthened, which in turn exacerbated the decline in Japanese stock prices.
In terms of domestic factors, an impending consumption tax hike increased
uncertainty among investors. A certain amount of disappointment regarding the
progress of Prime Minister Shinzo Abe's third arrow - growth and reform
policies - also played a part.

More recently, however, improving US economic indicators and signs of a
recovery in China, enhanced investors' confidence in the global growth outlook,
while concerns about the impact of Japan's sales tax hike started to ease and
earnings revisions turned positive. Prime Minister Shinzo Abe announced the
Government's revised growth strategy, which raised expectations of a reduction
in the corporate tax rate and a shift in asset allocation at the Government
Pension Investment Fund ("GPIF"). The Bank of Japan's quarterly Tankan survey
suggested that corporate sentiment was gradually recovering after the sales tax
hike and underscored an increased willingness to engage in capital investment.

The Japanese equity market has been making up lost ground since the end of
April. Trading value has shown a modest recovery, with notable purchases of
Japanese stocks by pension funds among domestic investors and a return to net
buying by overseas investors. The rally was led by small-cap and value stocks,
which were sold off during the first three months of the year. Their share
price bounced back strongly as investors' concerns about the macroeconomic
outlook receded. An increased focus on shareholder returns has also been
evident. Japanese companies are undertaking share buybacks at a record pace,
with ¥2.8 trillion of purchases announced so far this year compared with ¥2.9
trillion in the whole of 2013. Meanwhile, estimated annual dividends per share
for the TOPIX Index have also increased, rising to the highest level since
2008.

PORTFOLIO REVIEW

The Company's net asset value ("NAV") rose by 4.2% to 82.32 pence per share
during the review period. Meanwhile, the share price rose by 3.5% to 74.50
pence per share, resulting in the discount to NAV widening slightly. The
Company outperformed its Reference Index, the Russell Nomura Mid/Small Cap
Index, which only returned 0.9% (in sterling terms).

The best performing stock during the review period was Sanix, which is the
largest overweight position in the Company's portfolio. It is a solar power
integrator that installs small-scale solar panels for both commercial and
residential use. Sanix has built a unique business model that covers production
of mountings, power controllers and modules, as well as the sales, installation
and maintenance of the solar power generation system. The number of
applications for solar power system installations is growing rapidly thanks to
the Japanese Government's subsidies for purchasing clean energy.

Japan Aviation Electronics was another good performer in the portfolio. It is a
niche manufacturer of connectors used for smartphones and automobiles. It is
benefiting from secular growth in electronic parts used for automobiles and has
successfully maintained a large market share in connectors used for mobile
devices. The record operating profit for the year ended March 2014 drove its
share price higher towards the end of the review period.

M3, which is a name familiar to our shareholders, also ranked in the top ten
contributors. It has consistently added value over time since the position was
initiated in 2007. It provides web-based, two-way marketing/customer support
services for pharmaceutical companies and doctors. Although pharmaceutical
marketing services is not a growth industry, M3 has created its own niche by
changing existing business practices through the utilisation of its internet
infrastructure.

Elsewhere, two of the last year's major detractors, Gulliver International
(used car retailer) and Fuji Kyuko (passenger rail and coach services), ranked
in the top ten contributors for the period under review.

Conversely, the single largest detractor was Livesense, which operates job
placement and rental apartment search websites. Although the company was
well-positioned to benefit from increasing job offers, its profits came under
pressure from a decline in successful job placements and rising advertisement
costs. As we did not see any near-term improvement in their cost structure, we
closed the position in Livesense.

Stock selection in the machinery and chemicals sectors also fared less well.
Nuflare Technology (semiconductor production equipment), fell on near-term
earnings disappointments, but its overweight position has been maintained. Its
valuation remains cheap and we expect its dominant global market share in mask
writers to drive long-term growth. In the chemicals sector, an insecticide
producer, Nihon Nohyaku, experienced a correction after its share price more
than tripled in 2013. However, we see no change in its fundamentals. Nihon
Nohyaku is enjoying strong sales growth with a product called Belt which is
distributed globally by Bayer.

During the review period, the portfolio maintained a balance between domestic
consumer services and pro-cyclical manufacturers. We maintained a strong sell
discipline, actively trimming positions when further upside appeared limited.
For example, the Company capitalised on the strong performance of Lintec (niche
producer of pressure-sensitive adhesives) to take profits, while the positions
in Tokuyama (electronic materials and chemical producer) and Livesense (job
placement agency) were closed because of mid-term earnings disappointments.

Also, electronic component producers, Taiyo Yuden and Nichicon, were sold, as
their earnings growth momentum appears to be weaker than expected in the near
term. In the meantime, overweight positions were initiated in other electronic
component makers such as Rohm and Dai-Ichi Seiko, whose share price valuations
had not fully reflected their earnings recovery.

The Company has continued to maintain an overweight stance in services
companies and retailers. Share price weakness due to concerns about the impact
of April's sales tax hike provided us with opportunities to build positions in
e-commerce operator Rakuten and drug store chain operator Sugi Holdings.
Rakuten is well positioned to gain domestic market share through its hybrid
business model of financial services and online shopping. Sugi maintains strong
top-line and operating-profit growth momentum, as well as double-digit returns
on equity.

OUTLOOK

As concerns about the macro- and microeconomic repercussions of April's sales
tax hike have eased, the investment environment for Japanese stocks has become
more favourable. Indeed, some leading economic indicators have started to
recover and earnings revisions have turned positive after bottoming out in
mid-April. Valuation multiples have largely reverted to pre-Abenomics (economic
policies advocated by Prime Minister Shinzo Abe) levels and Japanese stocks
appear cheap relative to other developed markets.

Furthermore, the Abe Government's recently unveiled `New Growth Strategy'
contains a number of meaningful proposals from an equity perspective, including
improvements in corporate governance, reform of the GPIF and phased reductions
in the corporate tax rate.

At a macroeconomic level, there are increasing signs that Japan is emerging
from its protracted deflationary cycle. The corporate sector also appears to be
weathering the recent consumption tax hike relatively well. Whilst a
reactionary post-hike contraction is anticipated in the April-June statistics
(according to consensus estimates), real GDP contracted by 4.4% annualised, the
economy is expected to return to an upward trend in the third quarter,
supported by improvements in employment and private capital investment, as well
as a gradual pickup in exports. In the absence of any sudden changes, the
potential for further monetary easing by the Bank of Japan in the short-term
appears low given Governor Haruhiko Kuroda's relatively optimistic view of the
price outlook.

After declining since the start of the year, the earnings revision index
recently moved back into positive territory. Consensus forecasts initially
declined in response to companies' extremely conservative guidance. However,
sentiment is gradually improving. Aggregate profits are set to increase for a
third consecutive year in fiscal 2014, as the impact of the sales tax hike
wanes, Japan steadily exits deflation and the US economic recovery gains
traction. Meanwhile, a proposed cut in the effective corporate tax rate to
below 30% could be a major positive for the equity market. Government-led
measures to enhance corporate governance and encourage a shift toward equity
allocation by the GPIF could also ignite substantial equity inflows.

A combination of rising earnings per share and market underperformance in the
first half of the year means that Japanese equities have been derated. The
forward price-to-earnings ratio now compares favourably with other developed
markets. Given a turnaround in the investment environment and positive policy
developments, such as the Government's new growth strategies, Japan remains on
the right track.

FIL Investments International

31 July 2014

Twenty Largest Investments as at 30 June 2014

Twenty Largest Investments, including      Exposure         Fair         Total 
long CFDs                                     £'000       Value1     Exposure2 
                                                           £'000             % 
                                                                               
Sanix                                         3,957        3,957           3.6 
                                                                               
Solar power integrator                                                         
                                                                               
M3 (CFD)                                      3,841        2,087           3.5 
                                                                               
Provider of medical related internet                                           
services                                                                       
                                                                               
Seria                                         3,613        3,613           3.3 
                                                                               
Operator of `100 yen' chain stores                                             
throughout Japan                                                               
                                                                               
Tosho                                         3,277        3,277           3.0 
                                                                               
Operator of sports club facilities,                                            
hotels and golf courses                                                        
                                                                               
WirelessGate                                  2,621        2,621           2.4 
                                                                               
Provider of high-speed wireless                                                
communication services                                                         
                                                                               
Fuji Kyuko                                    2,341        2,341           2.2 
                                                                               
Provider of passenger rail and coach                                           
services                                                                       
                                                                               
N Field                                       2,299        2,299           2.1 
                                                                               
Provider of home care services                                                 
                                                                               
Japan Aviation Electronics                    2,249        2,249           2.1 
                                                                               
Manufacturer of electrical connectors                                          
and aerospace equipment                                                        
                                                                               
Rohm (CFD)                                    2,187          147           2.0 
                                                                               
Manufacturer and distributor of                                                
electronic components                                                          
                                                                               
Stanley Electric                              2,168        2,168           2.0 
                                                                               
Manufacturer and distributor of                                                
automobile equipment                                                           
                                                                               
Hamamatsu Photonics                           2,145        2,145           2.0 
                                                                               
Manufacturer and distributor of imaging                                        
equipment                                                                      
                                                                               
Gulliver International                        2,084        2,084           1.9 
                                                                               
Distributor of used cars                                                       
                                                                               
Sekisui Chemical (CFD)                        2,034          644           1.9 
                                                                               
Producer of housing materials, plastics                                        
and flat panel displays                                                        
                                                                               
Sumitomo Electric Industries (CFD)            1,957          274           1.8 
                                                                               
Manufacturer of electric wire and                                              
optical fibre cables                                                           
                                                                               
Hikari Tsushin                                1,918        1,918           1.8 
                                                                               
Retailer of electronic devices                                                 
                                                                               
Nihon Nohyaku                                 1,827        1,827           1.7 
                                                                               
Manufacturer of agrochemical and                                               
pharmaceutical products                                                        
                                                                               
Round One                                     1,675        1,675           1.5 
                                                                               
Operator of community leisure                                                  
facilities                                                                     
                                                                               
AEON Mall                                     1,663        1,663           1.5 
                                                                               
Specialist shopping mall developer                                             
                                                                               
Brother Industries                            1,642        1,642           1.5 
                                                                               
Manufacturer of office equipment and                                           
supplies                                                                       
                                                                               
Anritsu Company (CFD)                         1,596         (448)          1.5 
                                                                               
Manufacturer of test and measurement                                           
equipment                                                                      
                                                                               
Twenty Largest Investments                   47,094       38,183          43.3 
                                                                               
Other Investments                            61,733       53,400          56.7 
                                                                               
Total Portfolio (including long CFDs)       108,827       91,583         100.0 

GEARING as at 30 June 2014

                                                                         £'000 
                                                                               
Exposure to Investments                                                 87,284 
                                                                               
Exposure to long CFDs                                                   21,543 
                                                                               
Total portfolio exposure                                               108,827 
                                                                               
Shareholders' funds                                                     93,813 
                                                                               
Total portfolio exposure in excess of shareholders' funds                16.0% 

1 Fair value represents the carrying value in the Balance Sheet on page 16

2 % of the total exposure of the investment portfolio, including exposure to
the investments underlying the long CFDs

Interim Management Report

The Company is required to make the following disclosures in its Half-Yearly
Report:

PRINCIPAL RISKS AND UNCERTAINTIES

The Board, with the assistance of the Manager, has developed a risk matrix
which, as part of the risk management and internal control process, identifies
the key risks that the Company faces. The principal risks and uncertainties
faced by the Company continue to fall into the following categories: market
risk, performance risk, discount control risk, currency risk, gearing risk, tax
and regulatory risks, operational risks and financial instrument risks.
Information on each of these risks can be found in the Strategic Report section
within the Annual Report for the year ended 31 December 2013.

RELATED PARTY TRANSACTIONS

There have been no related party transactions during the six month period to 30
June 2014.

GOING CONCERN

The Directors have a reasonable expectation that the Company has adequate
resources to continue in operational existence for the foreseeable future. Thus
they continue to adopt the going concern basis of accounting in preparing the
financial statements as outlined in the Annual Report for the year ended
31 December 2013. The next continuation vote will be put to shareholders at the
Annual General Meeting in 2016.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors confirm to the best of their knowledge that:

a) the condensed set of financial statements contained within the Half-Yearly
Financial Report has been prepared in accordance with the UK Accounting
Standards Board's Statement `Half-Yearly Financial Reports'; and gives a true
and fair view of the assets, liabilities, financial position and net return of
the Company as required by the UK Listing Authority Disclosure and Transparency
Rules ("DTR") 4.2.4R; and

b) the Interim Management Report (which incorporates the Chairman's Statement
and Manager's Half-Yearly Review on pages 3 to 7) includes a fair review of the
information required by DTR Rules 4.2.7R and 4.2.8R.

The Half-Yearly Financial Report has not been audited or reviewed by the
Company's Independent Auditor.

The Half-Yearly Financial Report was approved by the Board on 31 July 2014 and
the above responsibility statement was signed on its behalf by David Robins,
Chairman.

Income Statement

                            year                         six                   
                          months                       ended                         months                   
                           ended                    31.12.13                          ended                   
                        30.06.14                     audited                       30.06.13                   
                       unaudited                                                  unaudited                    
                         revenue   capital   total   revenue   capital    total     revenue   capital    total 
                Notes      £'000     £'000   £'000     £'000     £'000    £'000       £'000     £'000    £'000 
                                                                                                               
Gains on                       -     4,171   4,171         -    13,932   13,932           -    19,064   19,064 
investments                                                                                                    
designated at                                                                                                  
fair value                                                                                                     
through profit                                                                                                 
or loss                                                                                                        
                                                                                                               
(Losses)/gains                 -      (261)   (261)        -     9,665    9,665           -     6,608    6,608 
on derivative                                                                                                  
instruments                                                                                                    
held at fair                                                                                                   
value through                                                                                                  
profit or loss                                                                                                 
                                                                                                               
Income              2        771         -     771     1,440         -    1,440         836         -      836 
                                                                                                               
Investment                  (459)        -    (459)   (1,076)        -   (1,076)       (534)        -     (534)
management fee                                                                                                 
                                                                                                               
Other expenses              (292)        -    (292)     (479)        -     (479)       (276)        -     (276)
                                                                                                               
Exchange losses               (7)      (57)    (64)      (59)     (654)    (713)        (37)     (107)    (144)
on other net                                                                                                   
assets                                                                                                         
                                                                                                               
                           ------    ------  ------    ------    ------   ------      ------    ------   ------
                                                                                                               
                                                                                                               
Net return/                   13     3,853   3,866      (174)   22,943   22,769         (11)   25,565   25,554 
(loss) before                                                                                                  
finance costs                                                                                                  
and taxation                                                                                                   
                                                                                                               
Finance costs                (37)        -     (37)      (73)        -      (73)        (36)        -      (36)
                                                                                                               
                           ------    ------  ------    ------    ------   ------      ------    ------   ------
                                                                                                               
                                                                                                               
Net (loss)/                  (24)    3,853   3,829      (247)   22,943   22,696         (47)   25,565   25,518 
return on                                                                                                      
ordinary                                                                                                       
activities                                                                                                     
before taxation                                                                                                
                                                                                                               
Taxation on         3        (58)        -     (58)      (84)        -      (84)        (48)        -      (48)
(loss)/return                                                                                                  
on ordinary                                                                                                    
activities                                                                                                     
                                                                                                               
                           ------    ------  ------    ------    ------   ------      ------    ------   ------
                                                                                                               
                                                                                                               
Net (loss)/                  (82)    3,853   3,771      (331)   22,943   22,612         (95)   25,565   25,470 
return on                                                                                                      
ordinary                                                                                                       
activities                                                                                                     
after taxation                                                                                                 
for the period                                                                                                 
                                                                                                               
                           ======    ======  ======    ======    ======   ======      ======    ======   ======
                                                                                                               
                                                                                                               
(Loss)/return       4     (0.07p)    3.38p   3.31p    (0.30p)   20.64p   20.34p      (0.09p)   23.61p   23.52p 
per ordinary                                                                                                   
share -                                                                                                        
undiluted and                                                                                                  
diluted                                                                                                        
                                                                                                               
                           ======    ======  ======    ======    ======   ======      ======    ======   ======
                                                                                                               
                                                                                              

A Statement of Total Recognised Gains and Losses has not been prepared as there
are no gains and losses other than those reported in this Income Statement.

The total column of the Income Statement is the profit and loss account of the
Company.

All revenue and capital items in the above statement derive from continuing
operations.

No operations were acquired or discontinued in the period.

These financial statements have been prepared in accordance with the
Association of Investment Companies Statement of Recommended Practice issued in
January 2009.

Reconciliation of Movements in Shareholders' Funds

              Note      share      share     Capital     other    capital    revenue      total  
                      capital    premium  redemption   reserve    reserve    reserve     equity  
                        £'000    account     reserve     £'000      £'000      £'000      £'000  
                                   £'000       £'000                                             
                                                                                                 
Opening                25,068        703      2,596     57,627    (14,489)   (13,471)    58,034  
shareholders'                                                                                    
funds at 1                                                                                       
January 2013                                                                                     
                                                                                                 
Issue of         5      4,308      5,170          -          -          -          -      9,478  
ordinary                                                                                         
shares on                                                                                        
exercise of                                                                                      
rights                                                                                           
attached to                                                                                      
subscription                                                                                     
shares                                                                                           
                                                                                                 
Exercise of      5       (862)       862          -          -          -          -          -  
rights                                                                                           
attached to                                                                                      
subscription                                                                                     
shares and                                                                                       
conversion                                                                                       
into ordinary                                                                                    
shares                                                                                           
                                                                                                 
Repurchase of    5        (25)         -         25        (59)         -          -        (59) 
ordinary                                                                                         
shares                                                                                           
                                                                                                 
Net return/                 -          -          -          -     25,565        (95)    25,470  
(loss) on                                                                                        
ordinary                                                                                         
activities                                                                                       
after                                                                                            
taxation for                                                                                     
the period                                                                                       
                                                                                                 
                    ---------- ---------- ---------- ---------- ---------- ---------- ---------- 
                                                                                                 
Closing                28,489      6,735      2,621     57,568     11,076    (13,566)    92,923  
shareholders'                                                                                    
funds at 30                                                                                      
June 2013                                                                                        
                                                                                                 
                    ========== ========== ========== ========== ========== ========== ========== 
                                                                                                 
Opening                25,068        703      2,596     57,627    (14,489)   (13,471)    58,034  
shareholders'                                                                                    
funds at 1                                                                                       
January 2013                                                                                     
                                                                                                 
Issue of         5      4,308      5,147          -          -          -          -      9,455  
ordinary                                                                                         
shares on                                                                                        
exercise of                                                                                      
rights                                                                                           
attached to                                                                                      
subscription                                                                                     
shares                                                                                           
                                                                                                 
Exercise of      5       (862)       862          -          -          -          -          -  
rights                                                                                           
attached to                                                                                      
subscription                                                                                     
shares and                                                                                       
conversion                                                                                       
into ordinary                                                                                    
shares                                                                                           
                                                                                                 
Repurchase of    5        (25)         -         25        (59)         -          -        (59) 
ordinary                                                                                         
shares                                                                                           
                                                                                                 
Net return/                 -          -          -          -     22,943       (331)    22,612  
(loss) on                                                                                        
ordinary                                                                                         
activities                                                                                       
after                                                                                            
taxation for                                                                                     
the year                                                                                         
                                                                                                 
                    ---------- ---------- ---------- ---------- ---------- ---------- ---------- 
                                                                                                 
Closing                28,489      6,712      2,621     57,568      8,454    (13,802)    90,042  
shareholders'                                                                                    
funds at 31                                                                                      
December 2013                                                                                    
                                                                                                 
                    ========== ========== ========== ========== ========== ========== ========== 
                                                                                                 
Opening                28,489      6,712      2,621     57,568      8,454    (13,802)    90,042  
shareholders'                                                                                    
funds at 1                                                                                       
January 2014                                                                                     
                                                                                                 
Net return/                 -          -          -          -      3,853        (82)     3,771  
(loss) on                                                                                        
ordinary                                                                                         
activities                                                                                       
after                                                                                            
taxation for                                                                                     
the period                                                                                       
                                                                                                 
                    ---------- ---------- ---------- ---------- ---------- ---------- ---------- 
                                                                                                 
                                                                                                 
                                                                                                 
Closing                28,489      6,712      2,621     57,568     12,307    (13,884)    93,813  
shareholders'                                                                                    
funds at 30                                                                                      
June 2014                                                                                        
                                                                                                 
                    ========== ========== ========== ========== ========== ========== ========== 
                                                                                                 
                                                                                                 

Balance Sheet

Company number 2885584

                                           30.06.14      31.12.13       30.06.13 
                                                                                 
                                           unaudited      audited       unaudited
                                                                                 
                               Notes          £'000         £'000          £'000 
                                                                                 
Fixed assets                                                                     
                                                                                 
Investments designated at fair               87,284        84,031         84,040 
value through profit or loss                                                     
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
Current assets                                                                   
                                                                                 
Derivative assets held at fair                4,892         6,263          7,938 
value through profit or loss                                                     
                                                                                 
Debtors                                         759           309          2,705 
                                                                                 
Cash at bank                                  2,416           662            742 
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
                                              8,067         7,234         11,385 
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
Creditors                                                                        
                                                                                 
Derivative liabilities held at                 (593)         (421)          (444)
fair value through profit or                                                     
loss                                                                             
                                                                                 
Other creditors                                (945)         (802)        (2,058)
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
                                             (1,538)       (1,223)        (2,502)
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
Net current assets                            6,529         6,011          8,883 
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
Total net assets                             93,813        90,042         92,923 
                                                                                 
                                          ==========    ==========     ==========
                                                                                 
                                                                                 
                                                                                 
Capital and reserves                                                             
                                                                                 
Share capital                         5      28,489        28,489         28,489 
                                                                                 
Share premium account                         6,712         6,712          6,735 
                                                                                 
Capital redemption reserve                    2,621         2,621          2,621 
                                                                                 
Other reserve                                57,568        57,568         57,568 
                                                                                 
Capital reserve                              12,307         8,454         11,076 
                                                                                 
Revenue reserve                             (13,884)      (13,802)       (13,566)
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
Total equity shareholders'                   93,813        90,042         92,923 
funds                                                                            
                                                                                 
                                          ==========    ==========     ==========
                                                                                 
                                                                                 
                                                                                 
Net asset value per ordinary          6      82.32p        79.02p         81.54p 
share                                                                            
                                                                                 
                                          ==========    ==========     ==========
                                                                                 
                                                                                 

Cash Flow Statement

                                                six          year            six 
                                             months         ended         months 
                                              ended      31.12.13          ended 
                                           30.06.14                     30.06.13 
                                                                                 
                                           unaudited      audited       unaudited
                                                                                 
                                              £'000         £'000          £'000 
                                                                                 
Operating activities                                                             
                                                                                 
Investment income received                      378           979            426 
                                                                                 
Income received on long CFDs                    196           278            172 
                                                                                 
Investment management fee paid                 (486)         (992)          (444)
                                                                                 
Directors' fees paid                            (56)          (82)           (56)
                                                                                 
Other cash payments                            (219)         (272)          (383)
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
Net cash outflow from operating                (187)          (89)          (285)
activities                                                                       
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
Servicing of finance                                                             
                                                                                 
Interest paid on long CFDs                      (37)          (73)           (36)
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
Net cash outflow from servicing of              (37)          (73)           (36)
finance                                                                          
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
Financial investments                                                            
                                                                                 
Purchase of investments                     (22,822)      (98,848)       (58,555)
                                                                                 
Disposal of investments                      23,575        84,792         48,877 
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
Net cash inflow/(outflow) from                  753       (14,056)        (9,678)
financial investments                                                            
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
Derivative activities                                                            
                                                                                 
Proceeds from long CFD positions              1,282         5,463            754 
closed                                                                           
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
Net cash inflow from derivative               1,282         5,463            754 
instruments                                                                      
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
Net cash inflow/(outflow) before              1,811        (8,755)        (9,245)
financing                                                                        
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
Financing                                                                        
                                                                                 
Exercise of rights attached to                    -         9,456          9,479 
subscription shares                                                              
                                                                                 
Repurchase of ordinary shares                     -           (59)           (59)
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
Net cash inflow from financing                    -         9,397          9,420 
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
Increase in cash                              1,811           642            175 
                                                                                 
                                          ==========    ==========     ==========
                                                                                 
                                                                                 
                                                                                 
Reconciliation of net cash                                                       
movements to movement in net funds                                               
                                                                                 
Net funds at the beginning of the               662           674            674 
period                                                                           
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
Net cash inflow                               1,811           642            175 
                                                                                 
Exchange movements                              (57)         (654)          (107)
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
Change in net funds                           1,754           (12)            68 
                                                                                 
                                          ----------    ----------     ----------
                                                                                 
                                                                                 
                                                                                 
Net funds at the end of the period            2,416           662            742 
                                                                                 
                                          ==========    ==========     ==========
                                                                                 
                                                                                 

Notes to the Financial Statements

1 ACCOUNTING POLICIES

The half-yearly financial statements have been prepared on the basis of the
accounting policies set out in the Company's annual report and financial
statements for the year ended 31 December 2013.

                                              30.06.14      31.12.13      30.06.13 
                                             unaudited       audited     unaudited 
                                                 £'000         £'000         £'000 
                                                                                   
2  INCOME                                                                          
                                                                                   
   Income from investments designated                                              
   at fair value through profit or                                                 
   loss                                                                            
                                                                                   
   Overseas dividends                              586         1,138           671 
                                                                                   
   Income from derivatives held at                                                 
   fair value through profit or loss                                               
                                                                                   
   Dividends on long CFDs                          185           302           165 
                                                                                   
                                             ----------    ----------    ----------
                                                                                   
                                                                                   
                                                                                   
   Total income                                    771         1,440           836 
                                                                                   
                                             ==========    ==========    ==========
                                                                                   
                                                                                   

                                              30.06.14     31.12.13      30.06.13 
                                             unaudited      audited     unaudited 
                                                 £'000        £'000         £'000 
                                                                                  
3  TAXATION ON (LOSS)/RETURN ON                                                   
   ORDINARY ACTIVITIES                                                            
                                                                                  
   Overseas taxation suffered                       58           84            48 
                                                                                  
                                             ==========    =========    ==========
                                                                   =              
                                                                                  

4 (LOSS)/RETURN PER ORDINARY SHARE - UNDILUTED AND DILUTED

The (loss)/return per ordinary share is based on the net (loss)/return on
ordinary activities after taxation for the period divided by the weighted
average number of ordinary shares in issue during the period. There are no
diluted (losses)/returns in the period because there were no subscription
shares in issue during the period. There were no diluted (losses)/returns in
the year ended 31 December 2013 or the half-year ended 30 June 2013 because the
average ordinary share price in the period, prior to all the subscription share
rights being exercised, was below the exercise price of the subscription
shares.

                                          30.06.14       31.12.13       30.06.13 
                                         unaudited        audited      unaudited 
                                             £'000          £'000          £'000 
                                                                                 
   Net revenue loss on ordinary                (82)          (331)           (95)
   activities after taxation for                                                 
   the period                                                                    
                                                                                 
   Net capital return on ordinary            3,853         22,943         25,565 
   activities after taxation for                                                 
   the period                                                                    
                                                                                 
                                         ----------     ----------     ----------
                                                                                 
                                                                                 
                                                                                 
   Net total return on ordinary              3,771         22,612         25,470 
   activities after taxation for                                                 
   the period                                                                    
                                                                                 
                                         ==========     ==========     ==========
                                                                                 
                                                                                 
                                                                                 
   Weighted average number of          113,954,834    111,140,691    108,279,905 
   ordinary shares in issue during                                               
   the period                                                                    
                                                                                 
                                         ==========     ==========     ==========
                                                                                 
                                                                                 
                                                                                 
                                          30.06.14       31.12.13       30.06.13 
                                         unaudited        audited      unaudited 
                                             pence          pence          pence 
                                                                                 
   Revenue loss per ordinary share           (0.07)         (0.30)         (0.09)
                                                                                 
   Capital return per ordinary                3.38          20.64          23.61 
   share                                                                         
                                                                                 
                                         ----------     ----------     ----------
                                                                                 
                                                                                 
                                                                                 
   Total return per ordinary share            3.31          20.34          23.52 
                                                                                 
                                         ==========     ==========     ==========
                                                                                 
                                                                                 
                                                                                 

                  30.06.14                  31.12.13                  30.06.13             
                                                                                           
                 unaudited                   audited                 unaudited             
                                                                                           
                    Number       £'000        Number        £'000       Number        £'000
                        of                        of                        of             
                    shares                    shares                    shares             
                                                                                           
5 SHARE                                                                                    
  CAPITAL                                                                                  
                                                                                           
  Issued,                                                                                  
  allotted and                                                                             
  fully paid:                                                                              
                                                                                           
  Ordinary                                                                                 
  shares of 25                                                                             
  pence each                                                                               
                                                                                           
  Beginning of 113,954,834      28,489    96,822,685       24,206   96,822,685       24,206
  the period                                                                               
                                                                                           
  Issue of               -           -    17,232,149        4,308   17,232,149        4,308
  ordinary                                                                                 
  shares on                                                                                
  the                                                                                      
  conversion                                                                               
  of rights                                                                                
  attached to                                                                              
  subscription                                                                             
  shares                                                                                   
                                                                                           
  Repurchase             -           -      (100,000)        (25)     (100,000)        (25)
  of ordinary                                                                              
  shares                                                                                   
                                                                                           
                 ----------  ----------    ----------  ----------    ----------  ----------
                                                                                           
                                                                                           
                                                                                           
  End of the   113,954,834      28,489   113,954,834       28,489  113,954,834       28,489
  period                                                                                   
                                                                                           
                 ==========  ==========    ==========  ==========    ==========  ==========
                                                                                           
                                                                                           
                                                                                           
  Issued,                                                                                  
  allotted and                                                                             
  fully paid:                                                                              
                                                                                           
  Subscription                                                                             
  shares of                                                                                
  5 pence each                                                                             
  (2009 Issue)                                                                             
                                                                                           
  Beginning of           -           -    17,232,149          862   17,232,149          862
  the period                                                                               
                                                                                           
  Exercise of            -           -   (17,232,149)       (862)  (17,232,149)       (862)
  rights                                                                                   
  attached to                                                                              
  subscription                                                                             
  shares and                                                                               
  conversion                                                                               
  into                                                                                     
  ordinary                                                                                 
  shares                                                                                   
                                                                                           
                 ----------  ----------    ----------  ----------    ----------  ----------
                                                                                           
                                                                                           
                                                                                           
  End of the             -           -             -            -            -            -
  period                                                                                   
                                                                                           
                 ==========  ==========    ==========  ==========    ==========  ==========
                                                                                           
                                                                                           
                                                                                           
  Total share                   28,489                     28,489                    28,489
  capital                                                                                  
                                                                                           
                             ==========                ==========                ==========
                                                                                           
                                                                                           

The subscription shares (2009 Issue) were issued as a bonus issue to ordinary
shareholders on 11 November 2009 on the basis of one subscription share for
every five ordinary shares held. Each subscription share gave the holder the
right, but not the obligation, to subscribe for one ordinary share upon payment
of the subscription price of 55 pence per subscription share, on the last
business day of each month, commenced in February 2010.

The final date to exercise these rights was 28 February 2013. After 28 February
2013, the Company appointed a trustee who exercised all the remaining rights
attached to the subscription shares that had not been exercised by
shareholders. The resulting ordinary shares were sold in the market and the
profits of this sale, being the net proceeds less the 55 pence per share cost
of exercising the rights and after deduction of expenses and fees, were paid to
the holders of those outstanding subscription shares.

6 NET ASSET VALUE PER ORDINARY SHARE

The net asset value per ordinary share is based on net assets of £93,813,000
(31 December 2013: £90,042,000 and 30 June 2013: £92,923,000) and on
113,954,834 (31 December 2013: 113,954,834 and 30 June 2013: 113,954,834)
ordinary shares, being the number of ordinary shares in issue at the period
end. There are no diluted net asset values per ordinary share because there
were no subscription shares in issue at any of the period ends.

7 INVESTMENT TRANSACTION COSTS

Transaction costs are incurred on the acquisition and disposal of investments.
These are included in the gains on investments designated at fair value through
profit or loss in the capital column of the Income Statement and are summarised
below:

                                             30.06.14      31.12.13      30.06.13 
                                                                                  
                                            unaudited       audited     unaudited 
                                                                                  
                                                £'000         £'000         £'000 
                                                                                  
   Purchases                                       25           101            62 
                                                                                  
   Sales                                           24            79            48 
                                                                                  
                                            ----------    ----------    ----------
                                                                                  
                                                                                  
                                                                                  
                                                   49           180           110 
                                                                                  
                                            ==========    ==========    ==========
                                                                                  
                                                                                  

8 UNAUDITED FINANCIAL STATEMENTS

The results for the six months ended 30 June 2014 and 30 June 2013, which are
unaudited, constitute non-statutory accounts within the meaning of Section 435
of the Companies Act 2006. The figures and financial information for the year
ended 31 December 2013 are extracted from the latest published financial
statements. These financial statements, on which the Independent Auditor gave
an unqualified report, have been delivered to the Registrar of Companies.

Shareholder Information

CONTACT INFORMATION

Private Investors: call free on 0800 41 41 10 9am to 6pm, Monday to Saturday.

Financial advisers: can call free on 0800 41 41 81 8am to 6pm, Monday to
Friday. www.fidelity.co.uk/its

Existing shareholders who have a specific query regarding their holding or need
to provide updated information, for example a change of address, should contact
the appropriate administrator.

Holders of ordinary shares Capita Asset Services, Registrars to Fidelity
Japanese Values PLC, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU.
Telephone: 020 8639 3399. Lines are open from 8.30am to 5.30pm, Monday to
Friday). Email: shareholderenquiries@capita.co.uk.

Details of individual shareholdings and other information can also be obtained
from the Registrars' website: www.capitaassetservices.com

Fidelity Share Plan investors Fidelity Investment Trust Share Plan, PO Box
12062, Mellon House, Ingrave Road, Brentwood, Essex CM14 9LX. Telephone: 0845
358 1107 (calls to this number are charged at 3.95p per minute from a BT
landline. Other telephone service providers' costs may vary).

Fidelity ISA investors Private investors call free on 0800 41 41 10 and
financial advisers call free on 0800 41 41 81, or by writing to: UK Customer
Service, Fidelity Worldwide Investment, Oakhill House, 130 Tonbridge Road,
Hildenborough, Tonbridge, Kent TN11 9DZ.

General enquiries should be made to Fidelity, FIL Investments International,
the Secretary, at the Company's registered office:

FIL Investments International, Investment Trusts, Beech Gate, Millfield Lane,
Lower Kingswood,
Tadworth, Surrey KT20 6RP.
Telephone: 01732 36 11 44
Fax: 01737 83 68 92 www.fidelity.co.uk/its

FINANCIAL CALENDAR

30 June 2014                    - Half-Yearly period end                       
                                                                               
July 2014                                                                      
                                - Announcement of Half-Yearly results          
                                                                               
August 2014                                                                    
                                - Publication of Half-Yearly report            
                                                                               
31 December 2014                                                               
                                - Financial year end                           
                                                                               
March/April 2015                                                               
                                - Publication of Annual Report                 
                                                                               
May 2015                                                                       
                                - Annual General Meeting                       

Shareholder Information

Board, Manager and Advisors

BOARD OF DIRECTORS
David Robins (Chairman)
David Miller, OBE (Senior Independent Director)
Sir Laurie Magnus (Audit Committee Chairman)
Simon Fraser
Philip Kay

ALTERNATIVE INVESTMENT FUND MANAGER (AIFM)
FIL Investment Services (UK) Limited
Beech Gate
Millfield Lane
Lower Kingswood
Tadworth
Surrey
KT20 6RP

PORTFOLIO MANAGER, SECRETARY AND REGISTERED OFFICE
FIL Investments International
Beech Gate
Millfield Lane
Lower Kingswood
Tadworth
Surrey
KT20 6RP

FINANCIAL ADVISERS AND STOCKBROKERS
Canaccord Genuity
88 Wood Street
London
EC2V 7QR

INDEPENDENT AUDITOR
Grant Thornton UK LLP
Chartered Accountants and Registered Auditor
30 Finsbury Square
London
EC2P 2YU

BANKERS AND CUSTODIAN
JPMorgan Chase Bank (London Branch)
125 London Wall
London
EC2Y 5AJ

DEPOSITARY
J.P. Morgan Europe Limited
25 Bank Street
London
E14 5JP

REGISTRARS
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU

LAWYERS
Slaughter and May
One Bunhill Row
London
EC1Y 8YY

Speechly Bircham LLP
6 New Street Square
London
EC4A 3LX

Glossary of Terms

AIF

Alternative Investment Fund. The Company is an AIF.

AIFM

Alternative Investment Fund Manager. The Board has appointed FIL Investment
Services (UK) Limited to act as the Company's AIFM.

AIFMD

The Alternative Investment Fund Managers Directive is a European Union
Directive and came into force on 22 July 2013. The implementation date was 22
July 2014.

CONTRACT FOR DIFFERENCE (CFD)

A Contract For Difference is a derivative. It is a contract between the Company
and an investment bank at the end of which the parties exchange the difference
between the opening price and the closing price of the underlying asset of the
specified financial instrument. It does not involve the Company buying or
selling the underlying asset, only agreeing to receive or pay the movement in
its share price. A Contract For Difference allows the Company to gain access to
the movement in the share price by depositing a small amount of cash known as
margin. The Company may reason that the asset price will rise, by buying
("long" position) or fall, by selling ("short" position). If the Company holds
long positions, dividends are received and interest is paid. If the Company
holds short positions, dividends are paid and interest is received. The Company
only uses long Contracts For Difference.

DERIVATIVES

Financial instruments whose value is derived from the value of an underlying
asset. The main categories of derivatives are Contracts For Difference, futures
and options.

DISCOUNT

If the share price of the Company is lower than the net asset value per share,
the Company's shares are said to be trading at a discount. The discount is
shown as a percentage of the net asset value. The opposite of a discount is a
premium. It is more common for an investment trust's shares to trade at a
discount than a premium.

FAIR VALUE

The fair value is the best estimate of the value of the investments, including
derivatives, at a point in time and this is measured as:

• Listed investments valued at bid prices, or last market prices, where
available, otherwise at published price quotations;

• Unlisted investments valued using an appropriate valuation technique in the
absence of an active market; and

• Contracts For Difference valued as the difference between the settlement
price of the contract and the value of the underlying shares in the contract
(unrealised gains or losses).

GEARING

Gearing describes the level of a Company's exposure and is expressed as a
percentage of shareholders' funds. It reflects the amount of exposure the
Company uses to invest in the market. It can be through the use of bank loans,
bank overdrafts or derivatives in order to increase a Company's exposure to
investments. If assets rise in value, gearing magnifies the return to ordinary
shareholders. Correspondingly, if the assets fall in value, gearing magnifies
the fall. The Company uses long Contracts For Difference to gain exposure to
the price movements of shares without buying the underlying shares directly.

GEARING PERCENTAGE

In a simple example, if a company has £100 million of net assets and a total
portfolio of £108 million, with £8 million of borrowings (either via bank loans
or long derivatives) then the shareholders' funds are 8% geared. Normally, the
higher the gearing percentage, the more sensitive the Company's shares will be
to movements up and down in the value of the investment portfolio.

HEDGING

A strategy aimed at minimising or eliminating the risk or loss through adverse
movements, normally involving positions in two different markets, with one
offsetting the other. The Company uses derivatives for gearing and investment
rather than hedging purposes.

NET ASSET VALUE (NAV)

Net asset value is sometimes also described as "shareholders' funds", and
represents the total value of the Company's assets less the total value of its
liabilities.

NAV ASSET VALUE PER ORDINARY SHARE

Represents the net asset value divided by the number of ordinary shares in
issue.

PREMIUM

If the share price of the Company is higher than the net asset value per share,
the Company's shares are said to be trading at a premium. The premium is shown
as a percentage of the net asset value. The opposite of a premium is a
discount.

REFERENCE INDEX

Russell Nomura Mid/Small Cap Index against which the performance of the Company
is measured.

RETURN

The return generated in the period from the investments:

• Revenue Return reflects the dividends and interest from investments and other
income net of revenue expenses, finance costs and taxation;

• Capital Return reflects the return on capital, excluding any revenue returns;

• Total Return reflects the aggregate of capital and revenue returns in the
period.

SHAREHOLDERS' FUNDS

Shareholders' funds are also described as "net asset value" and represent the
total value of the Company's assets less the total value of its liabilities.

SUBSCRIPTION SHARES (2009 ISSUE)

The subscription shares were issued as a bonus issue to ordinary shareholders
on 11 November 2009 on the basis of one subscription share for every five
ordinary shares held. The final date to exercise the rights attached to the
subscription shares was 28 February 2013.

TOTAL PORTFOLIO EXPOSURE

The total of fixed asset investments at fair value plus the fair value of the
underlying securities within the Contracts For Difference.

TOTAL RETURN PERFORMANCE

The return on the share price or net asset value per share taking into account
the rise and fall of share prices and the dividends paid to shareholders. Any
dividends received by the shareholder are assumed to have been reinvested in
additional shares (for share price total return) or the Company's assets (for
net asset value total return).

Investor Information

The Fidelity Individual Savings Account ("ISA") and Junior ISA are offered and
managed by Financial Administration Services Limited. The Fidelity Investment
Trust Share Plan is managed by FIL Investments International. Both companies
are authorised and regulated by the Financial Conduct Authority. The Fidelity
Investment Trust Share Plan is administered by The Bank of New York Mellon and
shares will be held in the name of The Bank of New York Nominees Limited.

The value of savings and eligibility to invest in an ISA will depend on
individual circumstances and all tax rules may change in the future. With
effect from 22 July 2014, Fidelity's investment trusts are managed by FIL
Investment Services (UK) Limited, the Alternative Investment Fund Manager. They
were previously managed by FIL Investments International. Fidelity only gives
information about its own products and services and does not provide investment
advice based on individual circumstances. Should you wish to seek advice,
please contact a Financial Adviser.

Please note that the value of investments and the income from them may fall as
well as rise and the investor may not get back the amount originally invested.
Past performance is not a guide to future returns. For funds that invest in
overseas markets, changes in currency exchange rates may affect the value of
your investment. Investing in small and emerging markets can be more volatile
than other more developed markets.

Reference in this document to specific securities should not be construed as a
recommendation to buy or sell these securities, but is included for the
purposes of illustration only. Investees should also note that the views
expressed may no longer be current and may have already been acted upon by
Fidelity.

Issued by Fidelity Japanese Values PLC.

Fidelity, Fidelity Worldwide Investment, the Fidelity Worldwide Investment logo
and symbol are trademarks of FIL Limited.

The content of websites referred to in this document do not form part of this
Half-Yearly Report.

Warning to Shareholders

SHARE FRAUD WARNING

Share fraud includes scams where investors are called out of the blue and
offered shares that often turn out to be worthless or non-existent, or an
inflated price for shares they own. These calls come from fraudsters operating
in `boiler rooms' that are mostly based abroad.

While high profits are promised, those who buy or sell shares in this way
usually lose their money.

The Financial Conduct Authority (FCA) has found most share fraud victims are
experienced investors who lose an average of £20,000, with around £200m lost in
the UK each year.

PROTECT YOURSELF

If you are offered unsolicited investment advice, discounted shares, a premium
price for shares you own, or free company or research reports, you should take
these steps before handing over any money:

1. Get the name of the person and organisation contacting you.

2. Check the FCA Register at www.fca.org.uk/register/ to ensure they are
authorised.

3. Use the details on the FCA Register to contact the firm.

4. Call the FCA Consumer Helpline on 0800 111 6768 if there are no contact
details on the Register or you are told they are out of date.

5. Search the FCA's website list of unauthorised firms and individuals to avoid
doing business with.

6. REMEMBER: if it sounds too good to be true, it probably is!

If you use an unauthorised firm to buy or sell shares or other investments, you
will not have access to the Financial Ombudsman Service or Financial Services
Compensation Scheme (FSCS) if things go wrong.

REPORT A SCAM

If you are approached about a share scam you should tell the FCA using the
share fraud reporting form at www.fca.org.uk/scams, where you can find out
about the latest investment scams. You can also call the Consumer Helpline on 
0800 111 6768.

 If you have already paid money to share fraudsters you should contact Action  
                                   Fraud on                                    

                                 0300 123 2040                                 

Fidelity, Fidelity Worldwide Investment, the Fidelity Worldwide Investment logo
                   and symbol are trademarks of FIL Limited                    

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The FSC® logo identifies products which contain wood from well-managed forests
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This document is printed on Cocoon Silk; a paper made using 50% recycled fibre
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Preliminary Announcement - Half-yearly Report - RNS