Baillie Gifford Japan Trust Half Year Fin. Report

Baillie Gifford Japan Trust PLC

02 April 2026

 

RNS Announcement

The Baillie Gifford Japan Trust PLC

Legal Entity Identifier: 54930037AGTKN765Y741

Regulated Information Classification: Interim Financial Report

Results for the six months to 28 February 2026

The following is the unaudited Interim Financial Report for the six months to 28 February 2026 which was approved by the Board on 1 April 2026.

In the six months to 28 February 2026, The Baillie Gifford Japan Trust's net asset value total return per share was 4.4% and the share price total return was 6.1%. The TOPIX total return (in sterling terms) was 22.4%.

§ Performance lagged the benchmark, with several of the portfolio's largest growth holdings detracting despite continued positive operational progress. The largest detractors from relative performance were CyberAgent, GMO Internet Group, Rakuten, SBI Holdings and GA Technologies. The Manager remains positive on their long-term prospects, noting improving profitability, restructuring initiatives and the opportunity presented by AI adoption.

§ Sumitomo Metal Mining was the largest contributor to performance over the period.

§ The Manager made new additions to high-growth opportunities, including Yaskawa Electric and Harmonic Drive, increasing exposure to the theme of "physical AI".

§ During the period, the Company bought back 2,925,000 shares (3.8% of issued share capital), which was NAV accretive for shareholders (0.4%).

§ The share price outperformed the NAV, reflecting a narrowing of the discount over the period.

§ Given that the forecast sales and earnings growth are ahead of the market, yet the portfolio trades at a meaningful discount to the market on a price to earnings and EV to EBIT basis, the Manager believes that this represents significant opportunity. 

 

Chair's Statement

Having taken over as Chair of Baillie Gifford Japan Trust at the AGM in December 2025, this is my first report to you as shareholders.

First, I would like to thank David Kidd for his dedicated service over many years as, variously, Non-Executive Director, Senior Independent Director and ultimately Chairman of the Company. We will greatly miss David's wisdom, insightful questioning and humour and wish him well for the future.

Second, I am pleased to welcome Robert Talbut, who joined the Board as a Non-Executive Director on 2 March 2026. Robert was appointed following a rigorous market search carried out by an independent professional search firm, with interviews conducted by the Board. He brings to the Board substantial investment management experience from an executive career in the industry encompassing hands-on investing through to team and investment process management as well as significant experience of the investment trust industry from the multiple boards on which he has served.

Performance

The net asset value (NAV) total return over the first half of the Company's financial year was 4.4%, compared with 22.4% for the TOPIX total return (in sterling terms), the Company's benchmark. The share price total return over the period was 6.1% and so the discount to NAV of the Company's shares narrowed from 11.4% to 10.1%.

Analysis of performance over the five years to the last financial year end shows a period of relative under-performance against the benchmark following the end of COVID when rising inflation and interest rates created a more challenging environment for the Manager's growth investment style. The extent of under-performance during that period impacted the Company's longer-term record and led the Board to intensify its engagement with the Manager to understand better the factors driving performance and to challenge various aspects of the investment process.

However, shareholders will recall that in the year to 31 August 2025, the last financial year of the Company, NAV increased by 20.5%, outperforming the benchmark by 8.4% and suggesting a return to favour of growth investing in Japan and the performance potential at such inflection points. It is therefore disappointing to report that the Company has reverted to significant under-performance in the first half of the current year, offsetting the benefit of last year's relative returns. Needless to say, performance remains the Board's foremost priority and we will continue to challenge the Manager on the strategy and its implementation.

Further details on performance are provided in the Manager's Report below.

Share Buybacks

As noted, over the six-month period to 28 February 2026, the share price discount to NAV narrowed from 11.4% to 10.1%. The Board continues to believe that, if the Company's shares trade at anything beyond a high single-digit discount, this presents an attractive opportunity to add value for shareholders through buybacks. During the reporting period, 2,925,000 shares were repurchased for a total consideration of £26.9 million, representing 3.8% of the Company's issued share capital. This increased the Company's net asset value by 0.4%. The repurchased shares are held in Treasury and are available to be reissued, at a premium, when market conditions allow.

Outlook

I would like to take this opportunity to remind readers of the attractions of Japan as an investment market, which include:

•         It is a wealthy, educated and democratic country with a high degree of political and social stability, underpinned by strong institutions, and which boasts the fourth-largest economy in the world;

•         a deep and liquid equity market which, unusually among developed markets, continues to see growth in new listings, thereby expanding the opportunity set and offering diversification for investors concerned about over-concentration elsewhere;

•         global leadership across a range of advanced technologies, alongside a range of internationally recognised branded goods companies and content owners/creators;

•         a market that remains relatively under-researched compared to a number of its developed market peers, offering potential excess return opportunities for active investors;

•         ongoing improvements in corporate governance and increased focus on capital efficiency, contributing to more shareholder-oriented policies; and

•         a currency which, on a number of measures, is presently materially under-valued relative to economic fundamentals.

Japan also faces well-known demographic challenges which weigh on overall economic growth, a situation which supports the thesis that the growth companies in which your Company invests should command a premium valuation over time. Your Manager remains confident that the growth the portfolio holdings offer is highly attractive relative to their valuations. That said, arguably this thesis has not been borne out by the Company's performance and is potentially further challenged, at least in the near term, by the policy direction of Japan's new Prime Minister. The Board is giving close consideration to this central issue, alongside continued scrutiny of the investment process and remains focused on building value for shareholders over the long term.

Sam Davis

Chair

1 April 2026

Interim Management Report

During the period the NAV total return of your Company was 4.4% whilst the share price total return was 6.1% and the TOPIX total return (in sterling terms) was 22.4%. Whilst the absolute return was positive it was disappointing to lag the wider Japanese market significantly.

5 stocks contributed -1ppt or more to the relative performance of the gross portfolio. These were CyberAgent (-1.8ppt), GMO Internet Group (-1.8ppt), Rakuten (-1.5ppt), SBI Holdings (-1.5ppt), and GA Technologies (-1.4ppt). For context 4 of these names were among the top 5 performers to the Company's August year-end and all are in the top 10 holdings of the Company.

We believe that it is important to distinguish between fluctuations in share prices and material changes to business outlook. Despite recent share price weakness, these names remain among the Company's highest-conviction holdings, reflecting a combination of long-term opportunity, competitive edge and the strength of underlying operational progress.

Looking in more detail at the recent progress in the operations of these 5 businesses, we see that CyberAgent's AbemaTV business has become profitable. GMO Internet Group is evolving into a more coherent investment holding company giving its subsidiaries more strategic and market visibility and we are actively engaging to support the completion of that journey. Rakuten's challenger mobile phone network business has also become profitable, removing a key risk and enabling the company to continue to seek synergies with its successful ecommerce and fintech offerings. SBI Holdings has simplified its management structure with the successful initial public offering of SBI Shinsei Bank (in which we chose to participate and which has delivered a positive contribution over the holding period so far). Finally, GA Technologies has continued to grow its sales and profits rapidly (to its unusual October year-end sales grew 31% and operating profits grew 92%).

It may be that the market has become concerned that these businesses could be negatively impacted by the rapid progress of Artificial Intelligence (AI). However, deeper analysis suggests that AI represents more of an opportunity than a threat as each of these businesses benefits from significant proprietary customer data, multiple mutually supporting business lines, and both the ambition and ability rapidly deploy AI internally.

The Japanese market has also continued to focus more on the cyclical parts of the market over the past 6 months. However, given events in Iran, which began the day after the end of the Company's reporting period, we are arguably now operating in a different environment where durable, non-cyclical and low carbon intensity businesses such as these will be more highly appreciated.

Sumitomo Metal Mining (1.3ppt) was the only stock to contribute 1ppt or more to relative performance as the share price increased 3-fold over the six-month period, mainly driven by enthusiasm for its gold mining businesses. Whilst we admire the business and its technical skills in extracting nickel and making complex materials we believe that the current valuation is now more appropriate and have therefore reduced the holding somewhat.

Since the share prices of the companies held generally appreciated in Yen terms over the period gearing made a positive contribution of 1.0ppt.

During the period we bought 5 new names and sold 4 names. Of note we bought Yaskawa Electric, a robot manufacturer, and Harmonic Drive, a robot joint manufacturer. Both increase the portfolio exposure to the theme of physical AI - robots with advanced AI 'brains' making them much more flexible and capable than traditional robots. We believe that advances in robotics will present attractive long-term growth opportunities for those companies able to manage the manufacturing complexities.

In line with our long-term time horizon the vast majority of the portfolio remained unchanged. Net gearing ended the period at 12.5%.

As at the August 2025 results, and consistent with our focus on growth businesses, the portfolio has exhibited sales growth significantly ahead of the market over the past 5 years and is forecast to continue to grow faster. While earnings growth has been good over the past 5 years, it has lagged the market due to the lack of exposure to the very strong returns from some of Japan's most cyclical companies. However, looking forward, the earnings growth is forecast to be ahead of the market again. In addition the portfolio currently trades at a meaningful discount to the index both on a price to earnings basis and on an EV to EBIT basis (which adjusts for balance sheet strength). This combination of better growth expectations at lower multiples is rare, and we believe represents significant opportunity.

http://www.rns-pdf.londonstockexchange.com/rns/1463Z_1-2026-4-1.pdf

http://www.rns-pdf.londonstockexchange.com/rns/1463Z_2-2026-4-1.pdf

Source: Baillie Gifford & Co, in yen terms as at 28 February 2026.

As the world is rocked by geopolitical conflict, Japan remains politically stable and focused on building prosperity. Your portfolio comprises high quality businesses with attractive financial characteristics. While these features were not rewarded to the same extent as the wider Japanese index in the last six months we continue to believe that the businesses are making strong operational progress and that over time that progress will be reflected by share price appreciation that exceeds that of the market.

Baillie Gifford & Co

1 April 2026

See Glossary of Terms and Alternative Performance Measures at the end of this document.

Total return information sourced from LSEG/Baillie Gifford. See disclaimer at the end of this document.

Past performance is not a guide to future performance.

Responsibility Statement

We confirm that to the best of our knowledge:

a.       the condensed set of Financial Statements has been prepared in accordance with FRS 104 'Interim Financial Reporting';

b.       the Interim Management Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.7R (being an indication of important events that have occurred during the first six months of the financial year, their impact on the condensed set of Financial Statements and a description of the principal risks and uncertainties for the remaining six months of the year); and

c.       the Interim Financial Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).

On behalf of the Board
Sam Davis
Chair
1 April 2026

List of Investments

as at 28 February 2026 (unaudited)

Name	Business	Value £'000	% of total investments
Secular Growth*
SBI Holdings	Online financial services holding company	41,233	4.7
FANUC	Industrial automation and robotics manufacturer	35,809	4.1
Rakuten	E-commerce marketplace and fintech operator	34,462	3.9
CyberAgent	Digital advertising and mobile gaming company	27,390	3.1
SMC	Pneumatic equipment and automation manufacturer	25,978	2.9
GMO Internet	Internet infrastructure and domain services provider	24,428	2.8
GA Technologies	AI-enabled real estate investment platform	23,392	2.6
Kubota	Agricultural machinery and tractor manufacturer	20,670	2.3
Misumi	Online mechanical components supplier	19,531	2.2
Eisai	Pharmaceutical drug developer and manufacturer	19,403	2.2
Keyence	Industrial automation sensors and equipment	19,103	2.2
Sato	Barcode printer and labelling solutions	19,102	2.2
Oisix	Organic food delivery subscription service	17,697	2.0
Seria	Discount retail chain	17,451	2.0
Recruit	Human resources and job placement services	11,867	1.3
Shimano	Bicycle and fishing equipment manufacturer	11,250	1.3
Daikin Industries	Air conditioning systems manufacturer	10,266	1.2
TKP	Meeting room rental operator	10,082	1.1
Yaskawa Electric	Industrial robots, servo motors and factory automation systems manufacturer	9,750	1.1
Raksul	Online printing services platform	8,763	1.0
M3	Healthcare platform and medical services provider	8,357	0.9
Nidec	Electric motor manufacturer	8,016	0.9
Lifenet Insurance	Online life insurance provider	7,363	0.8
Broadleaf	Vertical SaaS and e-ordering platforms for the automotive aftermarket and other industries	7,034	0.8
Vector	PR, digital marketing and press release distribution services company	6,454	0.7
Harmonic Drive	Precision reduction gears, actuators and motion-control components manufacturer	5,909	0.7
Nakanishi	Dental equipment manufacturer	5,886	0.7
Sysmex	Medical diagnostics equipment manufacturer	5,532	0.6
Nihon M&A Center	Merger and acquisition advisory services	3,999	0.5
Bengo4.com	Legal services portal operator; provider of CloudSign e-signature/contract management	3,867	0.4
Money Forward	Financial technology and accounting software	3,699	0.4
Infomart	B2B transaction platforms (ordering, e-invoicing, contracts), strong in food-service	3,605	0.4
Rizap	Personal fitness training company	3,523	0.4
freee K.K.	Cloud accounting software provider	3,464	0.4
BASE	E-commerce platform provider	3,442	0.4
MonotaRO	Industrial supplies e-commerce platform	3,363	0.4
Noritsu Koki	Diversified holding company with manufacturing and healthcare businesses	3,119	0.4
istyle	Beauty e-commerce platform	2,869	0.3
PeptiDream	Biotechnology and drug discovery company	2,729	0.3
Demae-can	Food delivery platform	2,558	0.3
		502,415	56.9
Growth Stalwarts†
Calbee	Snack food and cereal manufacturer	21,584	2.4
Unicharm	Personal care and hygiene products	18,299	2.1
Kansai Paint	Automotive and industrial paint manufacturer	13,755	1.6
Nintendo	Video game console and software developer	13,473	1.5
Pola Orbis	Direct-sales cosmetics manufacturer	12,493	1.4
Nippon Paint	Paint and coatings manufacturer	12,402	1.4
Sugi	Drugstore chain operator	9,178	1.0
PARK24	Parking lot and car-sharing operator	9,056	1.0
Kose	Cosmetics and skincare manufacturer	8,991	1.0
Square Enix	Video game publisher and developer	7,773	0.9
Shiseido	Global cosmetics and beauty products	7,578	0.9
Kao	Personal care and cleaning products	6,804	0.8
Olympus	Endoscopy-led medical device company	6,454	0.7
Pigeon	Baby care products manufacturer	5,819	0.7
		153,659	17.4
Special Situations#
SoftBank Group	Technology investment and telecommunications conglomerate	46,181	5.2
Sony	Electronics, gaming and entertainment conglomerate	28,734	3.3
MIXI	Social networking and mobile gaming platform	11,619	1.3
COLOPL	Mobile game developer	6,962	0.8
Casio Computer	Timepieces, calculators and electronic musical instruments manufacturer	5,396	0.6
		98,892	11.2
Cyclical Growth‡
Sumitomo Mitsui Trust Group	Trust bank and asset management services	39,817	4.5
Murata	Electronic components manufacturer	17,633	2.0
Bridgestone	Tyre and rubber products manufacturer	14,195	1.6
Nifco	Automotive plastic components manufacturer	13,822	1.5
Sumitomo Metal Mining	Non-ferrous metals mining company	10,766	1.2
SBI Shinsei Bank	Retail, institutional and consumer finance bank	10,555	1.2
DMG Mori	CNC machine tools manufacturer	8,676	1.0
Sega Sammy	Video games and entertainment developer	5,539	0.6
Tokyo Electron	Semiconductor production equipment manufacturer	5,116	0.6
Shima Seiki	Textile machinery manufacturer	2,388	0.3
		128,507	14.5
Total investments		883,473	100.0

Growth category

*   Secular Growth - opportunity to grow rapidly but where there are a number of potential outcomes.

†   Growth Stalwarts - growth is less rapid but more predictable.

#   Special Situations - performance has not been good but there is a reason to believe improvements are underway.

‡   Cyclical Growth - earnings do not rise every year but are expected to be higher from one cycle to the next.

Stocks highlighted in bold are the 20 largest holdings.

Income Statement
(unaudited)

	For the six months ended 28 February 2026			For the six months ended 28 February 2025
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Gains on investments	-	22,634	22,634	-	705	705
Currency gains/(losses)	-	5,786	5,786	-	(1,459)	(1,459)
Income	6,795	-	6,795	7,192	-	7,192
Investment management fee	(2,244)	-	(2,244)	(2,042)	-	(2,042)
Other administrative expenses	(389)	-	(389)	(370)	-	(370)
Net return before finance costs and taxation	4,162	28,420	32,582	4,780	(754)	4,026
Finance costs of borrowings	(1,165)	-	(1,165)	(1,186)	-	(1,186)
Net return on ordinary activities before taxation	2,997	28,420	31,417	3,594	(754)	2,840
Tax on ordinary activities	(686)	-	(686)	(719)	-	(719)
Net return on ordinary activities after taxation	2,311	28,420	30,731	2,875	(754)	2,121
Net return per ordinary share (note 5)	3.03p	37.26p	40.29p	3.41p	(0.89p)	2.52p

The total column of this statement is the profit and loss account of the Company. The supplementary revenue and capital columns are prepared under guidance published by the Association of Investment Companies.

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

A Statement of Comprehensive Income is not required as all gains and losses of the Company have been reflected in the above statement.

The accompanying notes are an integral part of the Financial Statements.

Balance Sheet
(unaudited)

	Notes	At 28 February 2026 £'000	At 31 August 2025 (audited) £'000
Fixed assets
Investments	6	883,473	889,768
Current assets
Debtors		6,796	2,473
Cash and cash equivalents		8,862	15,515
		15,658	17,988
Creditors
Amounts falling due within one year	7	(57,611)	(59,114)
Net current liabilities		(41,953)	(41,126)
Total assets less current liabilities		841,520	848,642
Creditors
Amounts falling due after more than one year	7	(57,169)	(60,494)
Net assets		784,351	788,148
Capital and reserves
Share capital		4,717	4,717
Share premium		213,902	213,902
Capital redemption reserve		203	203
Capital reserve		557,951	556,398
Revenue reserve		7,578	12,928
Equity shareholders' funds		784,351	788,148
Net asset value per ordinary share*		1,051.9p	1,017.1p
Ordinary shares in issue	8	74,566,440	77,491,440

*   See Glossary of Terms and Alternative Performance Measures at the end of this document.

Statement of Changes in Equity
(unaudited)

For the six months ended 28 February 2026

	Notes	Share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Capital reserve * £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 September 2025		4,717	213,902	203	556,398	12,928	788,148
Ordinary shares bought back	8	-	-	-	(26,867)	-	(26,867)
Net return on ordinary activities after taxation		-	-	-	28,420	2,311	30,731
Dividends paid during the period	4	-	-	-	-	(7,661)	(7,661)
Shareholders' funds at 28 February 2026		4,717	213,902	203	557,951	7,578	784,351

For the six months ended 28 February 2025

	Notes	Share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Capital reserve * £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 September 2024		4,717	213,902	203	514,122	15,435	748,379
Ordinary shares bought back	8	-	-	-	(46,767)	-	(46,767)
Net return on ordinary activities after taxation		-	-	-	(754)	2,875	2,121
Dividends paid during the period	4	-	-	-	-	(8,481)	(8,481)
Shareholders' funds at 28 February 2025		4,717	213,902	203	466,601	9,829	695,252

*   The capital reserve balance at 28 February 2026 includes unrealised investment holding gains of £67,966,000 (28 February 2025 - gains of £14,780,000).

Condensed Cash Flow Statement
(unaudited)

	Notes	Six months to 28 February 2026 £'000	Six months to 28 February 2025 £'000
Cash flows from operating activities
Net return on ordinary activities before taxation		31,417	2,840
Net gain on investments		(22,634)	(705)
Currency (gains)/losses		(5,786)	1,459
Finance costs of borrowings		1,165	1,186
Overseas withholding tax		(671)	(702)
Changes in debtors and creditors		(232)	(317)
Cash from operations		3,259	3,761
Interest paid		(1,184)	(1,065)
Net cash inflow from operating activities		2,075	2,696
Cash flows from investing activities
Acquisitions of investments		(94,443)	(18,484)
Disposals of investments		122,961	72,801
Net cash inflow from investing activities		28,518	54,317
Cash flows from financing activities
Ordinary shares bought back	8	(26,601)	(48,555)
Dividends paid	4	(7,661)	(8,481)
Bank loans drawn down		59,452	140,747
Bank loans repaid		(61,655)	(140,036)
Net cash outflow from financing activities		(36,465)	(56,325)
(Decrease)/increase in cash and cash equivalents		(5,872)	688
Exchange movements		(781)	(197)
Cash and cash equivalents at start of period*		15,515	5,305
Cash and cash equivalents at end of period*		8,862	5,796

*   Cash and cash equivalents represent cash at bank and short term money market deposits repayable on demand.

Notes to the condensed Financial Statements
(unaudited)

1.       Basis of Accounting

          The condensed Financial Statements for the six months to 28 February 2026 comprise the statements set out above with the related notes below. They have been prepared in accordance with FRS 104 'Interim Financial Reporting' and the AIC's Statement of Recommended Practice issued in November 2014 and updated in July 2022 with consequential amendments. They have not been audited or reviewed by the Auditor pursuant to the Auditing Practices Board Guidance on 'Review of Interim Financial Information'. The Financial Statements for the six months to 28 February 2026 have been prepared on the basis of the same accounting policies as set out in the Company's Annual Report and Financial Statements at 31 August 2025.

          Going concern

          Having considered the Company's principal risks and uncertainties, as set out on the inside front cover, together with its current position, investment objective and policy, its assets and liabilities, and projected income and expenditure, together with the Company's dividend policy, it is the Directors' opinion that the Company has adequate resources to continue in operational existence for the foreseeable future. The Board has considered severe but plausible downside scenarios, including the impact of heightened market volatility and macroeconomic and geopolitical concerns, including inflation and interest rates, but it does not believe the Company's going concern status is affected. The Company's assets, the majority of which are investments in quoted securities which are readily realisable, exceed its liabilities significantly. All borrowings require the prior approval of the Board. Gearing levels and compliance with borrowing covenants are reviewed by the Board on a regular basis. In accordance with the Company's Articles of Association, shareholders have the right to vote annually at the Annual General Meeting on whether to continue the Company. The next continuation vote will be in December 2026. The Directors have no reason to believe that the continuation resolution will not be passed at the Annual General Meeting. The Company has continued to comply with the investment trust status requirements of section 1158 of the Corporation Tax Act 2010 and the Investment Trust (Approved Company) (Tax) Regulations 2011. Accordingly, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing these Financial Statements and confirm that they are not aware of any material uncertainties which may affect the Company's ability to continue to do so over a period of at least twelve months from the date of approval of these Financial Statements.

2.       Financial Information

          The financial information contained within this Interim Financial Report does not constitute statutory accounts as defined in sections 434 to 436 of the Companies Act 2006. The financial information for the year ended 31 August 2025 has been extracted from the statutory accounts which have been filed with the Registrar of Companies. The Auditor's Report on those accounts was not qualified, did not include a reference to any matters to which the Auditor drew attention by way of emphasis without qualifying its report and did not contain statements under sections 498(2) or (3) of the Companies Act 2006.

3.       Investment Manager

          Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, has been appointed by the Company as its Alternative Investment Fund Manager and Company Secretary. The investment management function has been delegated to Baillie Gifford & Co. The management agreement can be terminated on not less than 6 months' notice, or on shorter notice in certain circumstances. The Annual management fee is 0.65% on the first £250 million of net assets and 0.55% on the remaining net assets, calculated and payable quarterly.

4.       Dividends

		Six months to 28 February 2026 £'000	Six months to 28 February 2025 £'000
	Amounts recognised as a distribution in the period: Previous year's final dividend of 10.00p paid 15 December 2025 (2025 - 10.00p paid on 18 December 2024)	7,661	8,481

          No interim dividend has been declared.

5.       Net Return Per Ordinary Share

		Six months to 28 February 2026 £'000	Six months to 28 February 2025 £'000
	Revenue return after taxation	2,311	2,875
	Capital return after taxation	28,420	(754)
	Total net return	30,731	2,121
	Weighted average number of ordinary shares in issue	76,266,303	84,364,962

          Net return per ordinary share is based on the above totals of revenue and capital and the weighted average number of ordinary shares in issue during each period. There are no dilutive or potentially dilutive shares in issue.

6.       Fair Value Hierarchy

          The fair value hierarchy used to analyse the basis on which the fair values of financial instruments held at fair value through the profit or loss account are measured is described below. Fair value measurements are categorised on the basis of the lowest level input that is significant to the fair value measurement.

Level 1 - using unadjusted quoted prices for identical instruments in an active market;

Level 2 - using inputs, other than quoted prices included within Level 1, that are directly or indirectly observable (based on market data); and

Level 3 - using inputs that are unobservable (for which market data is unavailable).

          The fair value of listed investments is the last traded price which is equivalent to the bid price on Japanese markets.

          The financial assets designated as valued at fair value through profit or loss are all categorised as Level 1 in the above hierarchy. None of the financial liabilities are designated at fair value through profit or loss in the Financial Statements.

          All of the Company's investments fall into Level 1 for the periods reported.

7.       Borrowings

		At 28 February 2026	At 31 August 2025
	Due within one year*:
	1 year floating rate revolving credit facility with Bank of New York Mellon for ¥15,000 million, expiring August 2026	¥10,500 million (£50.023 million) at 2.49%	¥11,000 million (£55.453 million) at 1.92%
		£50.023 million	£55.453million
	Due after one year:
	Fixed rate unsecured private notes with Canada Life:
	-.. ¥4,000 million Series A Senior Notes due 20 November 2029	¥4,000 million at 1.56% (£19.057 million)	¥4,000 million at 1.56% (£20.165 million)
	-.. ¥4,000 million Series B Senior Notes due 20 November 2034	¥4,000 million at 2.05% (£19.056 million)	¥4,000 million at 2.05% (£20.165 million)
	-.. ¥4,000 million Series C Senior Notes due 20 November 2038	¥4,000 million at 2.55% (£19.056 million)	¥4,000 million at 2.55% (£20.164 million)
		£57.169 million	£60.494 million

          During the six month period to 28 February 2026, the Company repaid ¥2,500 million and drew down ¥2,000 million under its revolving credit facility with Bank of New York Mellon, resulting in a net repayment of ¥500 million.

* Within the Balance Sheet, the bank loan is included in Creditors: Amounts falling due within one year, along with other short-term creditors.

8.       Share Capital

          The Company has the authority to issue shares/sell Treasury shares at a premium to net asset value as well as to buy back shares at a discount to net asset value. During the period, no shares were issued and 2,925,000 shares were bought back into Treasury (28 February 2025 - nil issued and 6,395,000 bought back). There were 19,761,769 shares held in Treasury at 28 February 2026 (28 February 2025 - 13,190,595). Between 1 March 2026 and 31 March 2026, the Company bought back a further 2,780,000 shares into Treasury. The Company has authority remaining to buy back 7,067,102 ordinary shares.

9.       Related Party Transactions

          There have been no transactions with related parties during the first six months of the current financial year that have materially affected the financial position or the performance of the Company during that period and there have been no changes in the related party transactions described in the last Annual Report and Financial Statements that could have had such an effect on the Company during that period.

10.     Principal Risks and Uncertainties

          The principal risks facing the Company are financial risk, discount risk, investment strategy and smaller company risk, climate and governance risk, leverage risk, custody, depositary and reliance on third party service provider risk, cyber security risk, regulatory risk, political and associated economic risk and emerging risks. An explanation of these risks and how they are managed is set out on pages 28 to 31 of the Company's Annual Report and Financial Statements for the year to 31 August 2025 and is available on the Company's website: japantrustplc.co.uk.

          The principal risks and uncertainties have not changed since the date of the Annual Report.

Glossary of Terms and Alternative Performance Measures ('APM')

Net Asset Value

Also described as shareholders' funds, net asset value ('NAV') is the value of total assets less liabilities (including borrowings). The NAV per share is calculated by dividing this amount by the number of ordinary shares in issue. Borrowings are valued at their book value. The Company's yen denominated loans are valued at their sterling equivalent. Net Asset Value can also be expressed with borrowings valued at an estimate of their market worth or "fair value".

(Discount)/Premium (APM)

As stockmarkets and share prices vary, an investment trust's share price is rarely the same as its NAV. When the share price is lower than the NAV per share it is said to be trading at a discount. The size of the discount is calculated by subtracting the NAV per share from the share price and is usually expressed as a percentage of the NAV per share. If the share price is higher than the NAV per share, this situation is called a premium.

	28 February 2026		31 August 2025
	NAV (book)	NAV (fair)	NAV (book)	NAV (fair)
NAV	1,051.9p	1,054.1p	1,017.1p	1,017.2p
Share price	946.0p	946.0p	901.0p	901.0p
Discount	(10.1%)	(10.3%)	(11.4%)	(11.4%)

Total Return (APM)

The total return is the return to shareholders after reinvesting the net dividend on the date that the share price goes ex-dividend.

		28 February 2026			28 February 2025
		NAV (book)	NAV (fair)	Share price	NAV (book)	NAV (fair)	Share price
Closing NAV per ordinary share/share price	(a)	1,051.9p	1,054.1p	946.0p	856.9p	855.9p	767.0p
Dividend adjustment factor*	(b)	1.0097	1.0097	1.0107	1.0127	1.0127	1.0142
Adjusted closing NAV per ordinary share/share price	(c) = (a) x (b)	1,062.1p	1,064.4p	956.2p	867.8p	866.8p	777.9p
Opening NAV per ordinary share/share price	(d)	1,017.1p	1,017.2p	901.0p	855.0p	854.9p	756.0p
Total return	((c) ÷ (d)) -1	4.4%	4.6%	6.1%	1.5%	1.4%	2.9%

*   The dividend adjustment factor is calculated on the assumption that the dividend of 10.00p (2025 - 10.00p) paid by the Company in the period under review was invested into shares of the Company at the cum income NAV per ordinary share/share price, as appropriate, at the ex-dividend date.

Gearing (APM)

At its simplest, gearing is borrowing. Just like any other public company, an investment trust can borrow money to invest in additional investments for its portfolio. The effect of the borrowing on the shareholders' assets is called 'gearing'. If the Company's assets grow, the shareholders' assets grow proportionately more because the debt remains the same. But if the value of the Company's assets falls, the situation is reversed. Gearing can therefore enhance performance in rising markets but can adversely impact performance in falling markets. The level of gearing can be adjusted through the use of derivatives which affect the sensitivity of the value of the portfolio to changes in the level of markets.

Net gearing is the Company's borrowings less cash and cash equivalents expressed as a percentage of shareholders' funds.

Gross gearing is the Company's borrowings expressed as a percentage of shareholders' funds.

		28 February 2026		31 August 2025
		Net gearing * £'000	Gross gearing † £'000	Net gearing * £'000	Gross gearing † £'000
Borrowings	(a)	107,192	107,192	115,947	115,947
Cash and cash equivalents	(b)	8,862	-	15,515	-
Shareholders' funds	(c)	784,351	784,351	788,148	788,148
Gearing		12.5%	13.7%	12.8%	14.7%

*   Gearing: ((a) - (b)) divided by (c), expressed as a percentage.

†   Potential gearing: (a) divided by (c), expressed as a percentage.

Leverage (APM)

For the purposes of the UK Alternative Investment Fund Managers (AIFM) Regulations, leverage is any method which increases the Company's exposure, including the borrowing of cash and the use of derivatives. It is expressed as a ratio between the Company's exposure and its net asset value and can be calculated on a gross and a commitment method. Under the gross method, exposure represents the sum of the Company's positions after the deduction of sterling cash balances, without taking into account any hedging and netting arrangements. Under the commitment method, exposure is calculated without the deduction of sterling cash balances and after certain hedging and netting positions are offset against each other.

Active Share (APM)

Active share, a measure of how actively a portfolio is managed, is the percentage of the portfolio that differs from its comparative index. It is calculated by deducting from 100 the percentage of the portfolio that overlaps with the comparative index. An active share of 100 indicates no overlap with the index and an active share of zero indicates a portfolio that tracks the index.

Further Shareholder Information

The Baillie Gifford Japan Trust aims to achieve long term capital growth principally through investment in medium and smaller sized Japanese companies which are believed to have above average prospects for growth, although it invests in larger companies when considered appropriate.

At 28 February 2026, the Company had total assets of £891.5m (before deduction of borrowings of £107.2m).

The Company is managed by Baillie Gifford, an Edinburgh based fund management group with around £182bn under management and advice as at 1 April  2026.

Past performance is not a guide to future performance. The value of an investment and any income from it is not guaranteed and may go down as well as up and investors may not get back the amount invested. This is because the share price is determined by the changing conditions in the relevant stock markets in which the Company invests and by the supply and demand for the Company's shares. You should view your investment as long term. You can find up to date performance information about The Baillie Gifford Japan Trust PLC on the Company website at japantrustplc.co.uk.†

The Interim Financial Report will be available at japantrustplc.co.uk† and will be posted to shareholders on or around 14 April 2026.

For further information please contact:

Baillie Gifford & Co

Tel: [phone]

[e-mail]

Jonathan Atkins, Director, Four Communications

Tel: [phone] or 07872 495396

None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

†   Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

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