Final Results

FIDELITY JAPANESE VALUES PLC

Preliminary Announcement of Unaudited Results
for the year ending 31 December 2004


Chairman's Statement


The Year's Results:                       
                                          
NAV                                   +17.9% 
                                          
Share Price:                          +21.1% 
                                          
Russell Nomura Mid/Small Cap Index    +11.0% 
                                          
Discount:                              13.3%
                                          

Please note that past performance is not a guide to future returns.  The value
of investments can go down as well as up, and may be affected by exchange rate
fluctuations.

Performance Review

I can confirm that, as mentioned by my predecessor last year, it is our primary
objective to make money for our shareholdersand further it is a secondary and
not unimportant objective that we do better than the market. I am pleased to
report that we have achieved both objectives this year with the net asset value
of the Company rising by 17.9%, outperforming the broader market index Topix
(+7.4%) as well as the Russell Nomura Mid/Small Cap Index (+11.0%) which is our
benchmark index of mid/small cap stocks; the Company's share price rose by over
21% in the year.

Individual stockselection in the information & communication, retail, and
service sectors contributed to the Company's returns, although this was
somewhat offset by the below par performance of stocks of technology
manufacturers and materials suppliers which cater for digital consumer
electronics.

Market Review

Despite periods of sharp volatility, Japanese equities rose over the year. The
major benchmark indices generated their first consecutive annual gains in
almost a decade.

In 2004, market sentiment was mixed.  Further evidence that Japan was making
progress towards the final resolution of structural problems, such as excess
capacity, excess debt and low returns on capital, emerged during the period. 
However, concerns that surging oil prices and monetary tightening in the USand
Chinacould decelerate global economic growth continued to limit stock market
gains. 

Market performance was led by basic materials sectors including rubber
products, iron & steel, and oil & coal products due to strong commodity
prices.  Japanese banks also performed strongly as they made significant
progress in eliminating bad debts and their earnings prospects improved. 
Increased newsflow about industry consolidation in the banking and other
financial service sectors provided an additional boost for banks and consumer
credit companies.  On the other hand, weaker earnings growth at US technology
companies continued to weigh on the performance of Japanese technology-related
stocks.

Smaller companies continued to outperform their larger counterparts in 2004,
narrowing the valuation gap between big and small firms.

Directors' Remuneration

In recent years there has been a considerable increase in the regulatory,
governance and other requirements to which non-executive directors are
subject. This upward trend is expected to continue in the future. The Board has
taken note of this fact and of the requirement to recruit new Directors. A new
basis for fees has been established with effect from 1 July 2004.  As a result
of this fees have been increased to £25,000 (previously £15,000) per annum for
the Chairman and £16,000 (previously £10,000) per annum for Directors.  In
establishing these new levels independent advice was taken. 

The Board

As a result of the amendments to the Listing Rules which are due to come into
effect on 1 April 2005, there have been a number of changes to the Board during
the year. As mentioned in last year's Chairman's statement Alex
Hammond-Chambers retired as Chairman and Director of the Company on 31 December
2004. Alex had been a Director of the Company since its launch in 1994 and
Chairman since 1997 and his devotion to the best interests of the Company and
its shareholders was remarkable. He will be a hard act to follow. Sir John
Stanleywill retire as a Director of the Company on 31 March 2005and, like Alex,
John has been a Director since the launch of the Company and his challenging
and thought provoking contributions have always been extremely valuable. They
will both be sadly missed.

Philip Kay and David Miller were appointed to the Board during the year. Both
have considerable experience of investment in Japanand I am sure that you will
join me in welcoming them to the Board. As required by company law both Philip
and David will be seeking election by shareholders at the forthcoming Annual
General Meeting.

Nicholas Barberwho has served as a Director of the Company since December 2000
was appointed as the Company's senior independent director on 10 March 2005.

Gearing

The Company took the decision to refinance both of the Company's loans which
fell due for repayment during the year to 31 December 2004. These decisions
were taken after considerable discussion on the Company's level of gearing and
the prospects for Japanand Japanese smaller companies. It was generally agreed
that there had been a number of beneficial structural changes in corporate
Japanand that there were reasonable grounds for optimism about earnings growth
and the prospects for Japanese smaller companies.

The Company's level of net gearing is now 20% and the Board has instigated a
policy that it will in normal circumstances maintain its net gearing level at
below 30%.

In the year to 31 December 2004the Company's gearing contributed approximately
3 pence (5%) to the Company's NAV.

Share Buybacks

Purchases of shares for cancellation are made at the discretion of the Board
and within guidelines set from time to time by the Board in the light of
prevailing market conditions. Share repurchases will only be made when they
will result in an enhancement to NAV for the remaining shareholders. In recent
years share repurchases have been used sparingly due to their impact on
liquidity and gearing and no repurchases were made in the year to 31 December
2004. The Board continues to believe that the ability to repurchase shares is a
valuable tool and therefore a resolution to renew the Company's authority to
repurchase shares will be proposed at the forthcoming Annual General Meeting.

Annual General Meeting:  10 May 2005

The Annual General Meeting will be held at middayon 10 May 2005at Fidelity's
offices at 25 Cannon Streetin the City of Londonand all investors are
encouraged to attend.  It is the one occasion in the year when shareholders can
meet all of the Directors as well as the investment manager, Asako Kibe.  You
may have questions, comments or suggestions which we would welcome and which
all shareholders should have the benefit of hearing.  Following the meeting
Asako Kibe will give a presentation on the past year and the prospects for the
current year.

The Market and Outlook

Over recent years there have been a number of false dawns in respect of the
recovery of the Japanese market, so it may be premature to be too optimistic,
however there are a number of straws in the wind which may herald an
improvement in the underlying situation. On the one hand, equities are likely
to remain sensitive to sharp movements in oil prices and the ¥/US$ exchange
rate.  Disappointing economic data from the UScould also unnerve investors.
Consensus opinion indicates that Japan's economy is likely to slow through the
first half of 2005, reflecting adjustments to exports and production.

On the other hand however, there are a number of factors that suggest that the
decline in the rate of growth will not be as steep as in previous downturns. 
Firstly, the decline in IT-related demand should be relatively minor. 
Secondly, capital expenditure in the non-manufacturing sector appears to have
bottomed.  Thirdly, there is little likelihood of a bubble or financial
crisis.  Fourthly, spending by elderly people is supporting personal
consumption.  Finally, aggregate inventories remain at historically low levels.

Against this economic background, corporate fundamentals continue to improve
and should act as a buffer against any significant downward momentum.  For the
2004/05 financial year, Japanese companies (Topix excluding financials) are
forecasting a 5.2% year-on-year increase in sales and a 22.7% year-on-year
increase in recurring profits.  The same firms estimate a reasonably positive
outlook for the financial year to 31 March 2006as well. Valuations of Japanese
shares (Topix excluding financials) look reasonably attractive, with the
forward price-to-earnings ratio standing at around 16x - the lowest level in 30
years.

Looking forward, there are a number of reasons to be upbeat about the prospects
for corporate Japanthrough 2005 and beyond. Many companies have already started
to revise the book value of their assets ahead of the introduction of mandatory
asset-impairment accounting in the 2005/06 financial year thus providing more
realistic balance sheets. The Industrial Revitalisation Corp. of Japan (a
government-backed rehabilitation agency), which in December arranged a bailout
plan for the struggling retailer Daiei, should play an increasingly important
role in the restructuring of indebted firms and elimination of banks'
non-performing loans. Furthermore, the legalisation of international
acquisitions funded by stock in 2005 will force Japanese companies to pay more
attention to shareholder value and the effective utilisation of free cashflow.

These factors in particular should enable Japanto take a significant step
towards resolving its post-bubble economic problems of the 1990s.  The removal
of idle assets and delinquent borrowers from companies' and banks' balance
sheets hopefully should pave the way towards an end to deflation and a
normalisation of the business cycle.

William Thomson
Chairman

10 March 2005

 

Enquiries: 

Barbara Powley - Fidelity Investments International

01737 836883

Issued by Fidelity Investments International.  Authorised and regulated by the
Financial Services Authority.

 

CB21742

 
FIDELITY JAPANESE VALUES PLC

Statement of Total Return (incorporating the revenue account) of the Company -
unaudited for the year ended 31 December 2004

 

                                    2004                    2003           
                                                        restated*       
                                                                         
                         Revenue Capital   Total Revenue Capital   Total
                           £'000   £'000   £'000   £'000   £'000   £'000
                                                                         
                                                                         
                                                                         
Gains on                       -  11,063  11,063       -  17,973  17,973 
investments                                                              
                                                                         
Income                       705       -     705     657       -     657 
                                                                         
Investment                  (884)      -    (884)   (673)      -    (673)
management fee                                                           
                                                                         
Other expenses              (369)      -    (369)   (266)      -    (266)
                                                                         
Exchange losses               (1)   (141)   (142)      -     (14)    (14)
                                                                         
Exchange gains/                -     594     594       -     (40)    (40)
(losses) on loans                                                        
                                                                         
Net (loss)/return                                                        
before finance                                                           
costs,                                                                   
realisation of                                                           
the warrant                                                              
reserve and                 (549) 11,516  10,967    (282) 17,919  17,637 
taxation                                                                 
                                                                         
Interest payable            (274)      -    (274)   (286)      -    (286)
                                                                         
Realised gain on                                                         
warrants                                                                 
unexercised                    -  10,197  10,197       -       -       - 
                                                                         
(Loss)/return on                                                         
ordinary                                                                 
activities before           (823) 21,713  20,890    (568) 17,919  17,351 
taxation                                                                 
                                                                         
Taxation on                                                              
return on                                                                
ordinary                     (48)      -     (48)    (66)      -     (66)
activities                                                               
                                                                         
(Loss)/return on                                                         
ordinary                                                                 
activities after                                                         
taxation for the                                                         
year                                                                     
attributable to             (871) 21,713  20,842    (634) 17,919  17,285 
equity                                                                   
shareholders                                                             
                                                                         
(Loss)/return per                                                        
ordinary share                                                           

Before                                                                   
realisation of                                                           
the warrant                                                              
reserve                   (0.89p)  11.73p  10.84p (0.65p)  18.25p  17.60p
                                                                         
After realisation                                                        
of the warrant                                                           
reserve                   (0.89p)  22.11p  21.22p (0.65p)  18.25p  17.60p
                                                                         

The revenue column of this 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 year.

 

*       The capital net return before finance costs, realisation of the warrant
reserve and taxation for the year ended 31 December 2003has been restated from
£17,959,000 to £17,919,000.  This restatement has been necessary as exchange
gains/(losses) are now included as part of the net return before finance costs
rather than a finance cost.  This restatement has no impact on the Company's
return on ordinary activities for the year ended 31 December 2003.

 
FIDELITY JAPANESE VALUES PLC

Balance Sheet - unaudited as at 31 December 2004

 
                                                   2004      2003  
                                                 £'000      £'000 
                                                                  
Fixed assets                                                      
                                                                  
Investments                                     85,376     72,616 
                                                                  
Current assets                                                    
                                                                  
Debtors                                            456        865 
                                                                  
Cash at bank                                       673      3,248 
                                                                  
                                                 1,129      4,113 
                                                                  
                                                                  
Creditors - amounts falling due within                            
one year                                                          
                                                                  
Fixed rate unsecured loans                           -    (16,660)
                                                                  
Other creditors                                   (455)      (731)                                                                
                                                  (455)   (17,391)
                                                                  
                                                                  
Net current assets/(liabilities)                   674    (13,278)
                                                                  
Total assets less current liabilities           86,050      59,338
                                                                  
Creditors - amounts falling due after                             
more                                                              
                                                                  
than one year                                                     
                                                                  
Fixed rate unsecured loans                     (16,066)         - 
                                                                  
Total net assets                                69,984     59,338 
                                                                  
Capital and reserves                                              
                                                                  
Called up share capital                         24,551     24,551 
                                                                  
Share premium account                               44         40 
                                                                  
Capital redemption reserve                       1,780      1,780 
                                                                  
Other reserves                                                    
                                                                  
Other reserve                                   60,369     60,369 
                                                                  
Other non-distributable reserve                      -          2 
                                                                  
Warrant reserve                                      -     10,198 
                                                                  
Capital reserve - realised                      (6,351)   (30,687)
                                                                  
Capital reserve - unrealised                      (213)     2,410 
                                                                  
Revenue reserve                                (10,196)    (9,325)
                                                                  
Total equity shareholders' funds                69,984     59,338 
                                                                  
Net asset value per ordinary share:              71.26p     60.42p
                                                                  
                                                                  
                                                                  
FIDELITY JAPANESE VALUES PLC

Cash Flow Statement - unaudited
for year ended 31 December 2004

                                                   2004       2003 
                                                  £'000      £'000 
                                                                   
Operating activities                                               
                                                                   
Investment income received                          629        570 
                                                                   
Interest received                                     3          9 
                                                                   
Investment management fee paid                     (864)      (631)
                                                                   
Directors' fees paid                                (68)       (32)
                                                                   
Other cash payments                                (283)      (179)
                                                                   
Net cash outflow from operating                    (583)      (263)
activities                                                         
                                                                   
Returns on investments and servicing of                            
finance                                                            
                                                                   
Interest paid                                      (275)      (286)
                                                                   
                                                                   
Net cash outflow from returns on                                   
investments and                                                    
servicing of finance                               (275)      (286)
                                                                   
                                                                   
Financial investment                                               
                                                                   
Purchase of investments                         (76,801)   (42,481)
                                                                   
Disposals of investments                         75,047     43,387 
                                                                   
Net cash (outflow)/inflow from financial         (1,754)       906 
investment                                                         
                                                                   
Net cash (outflow)/inflow before                 (2,612)       357 
financing                                                          
                                                                   
                                                                   
Financing                                                          
                                                                   
Exercise of warrants                                  1          - 
                                                                   
1.05% fixed rate unsecured loan repaid           (7,371)         - 
                                                                   
2.155% fixed rate unsecured loan repaid          (8,678)         - 
                                                                   
1.565% fixed rate unsecured loan drawn            7,371          - 
down                                                               
                                                                   
1.34% fixed rate unsecured loan drawn             8,678          - 
down                                                               
                                                                   
Net cash inflow from financing                        1          - 
                                                                   
(Decrease)/increase in cash                      (2,611)       357 
                                                                   
                                                                   
The above statements have been prepared on the basis of the accounting policies
as set out in the most recently published set of annual financial statements.

The figures for the year ended 31 December 2003 have been extracted from the
accounts for the year ended 31 December 2003 which have been delivered to the
Registrar of Companies and on which the Auditors gave an unqualified report.

The annual report and accounts will be posted to shareholders in April 2005 and
copies will also be available from the Secretary, Fidelity Investments
International, Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey
KT20 6RP.