Japanese stocks opened a new chapter and Nikkei reclaimed its 1989 high

He Nikkei 225 Its spectacular rise extended to an all-time high as global funds returned to a market that had been ignored for years in favor of faster-growing markets. China,

with The country is emerging from deflation And on the path of sustainable growth, the indicator closed at 39,098.68 points on Thursday, exceeding the previous maximum established. December 1989,

The rise ends a 34-year roller coaster ride in which the stock went from being the most valuable in the world to one of the most undervalued, before finding a balance between the two extremes.

,As soon as Japan becomes a normal country with inflation, its companies will have the ability to“, he says Masayuki MurataCEO of Balanced Portfolio Investments Sumitomo Life Insurance, ,It seems they are entering a world where revenues grow even as costs rise, rather than one where expenses have to be continually cut as sales decline.,

As of the previous record, the Japanese market had grown to the point of representing 37% of global shares, which was more than the US’s 29%. world Bank, It was valued more than almost any standard, such as real estate prices, inviting a crash that dragged the broader economy down with it, ultimately plunging the country into decades of stagnation.

However, the tables turned. Business reforms promised in the early years of former Prime Minister Shinzo Abe’s government are taking hold, Meanwhile, prices initially rose due to a weak post-war yen and rising commodity prices ukraine They have proven to be stronger and more enduring than many people expected. This is helping to promote the healthy inflation cycle that has been going on for some time.

He nikki It’s up about 17% so far this year, outpacing gains in other major markets. Strategists are becoming increasingly optimistic, and some expect new growth of up to 15%,

Even after the rally, many Japanese stocks remain at disappointing levels with 37% of members nikki It is trading below its book value. In theory, this means Investors can make more money by selling all the assets of the company rather than keeping it going., This amounts to a vote of no confidence in management, but it also shows the potential for upside if companies are managed properly.

shares are only 3% S&P 500 Trading below their book value. In this Stoxx Europe 600 Index, only one-fifth fall into this category. Today’s low valuations in Japan are a sharp contrast to valuations in 1989, when asset prices peaked at the second peak.

However, There are still reasons to be cautious, money can come back quickly China If global sentiment towards that market recovers, and India Is becoming a rival destination for global investors.

japanese economy unexpectedly entered recession in the last quarter of last year, despite the fact that the central bank continues to express its optimism about wage growth, key to the country’s continued recovery.

Meanwhile, some analysts have suggested that nikki It has become a momentum game, with index prices moving away from fundamentals.

However, at the moment, in Japan The drive to improve shareholder returns continues. tokyo stock exchange Encourages companies to publish reports on plans to increase their stock valuations. Some have announced share buybacks and dividend increases. Buying of companies by their managers increases and active investors also intensify their campaigns.

about a third of the companies nikkiExcluding the financial sector, they have net cash positions, meaning they have more cash than debt, which strengthens the objective of activist investors and tse, This is almost double the comparative figure S&P 500.

long periods of weakness and in -which has fallen to its lowest level in nearly half a century in terms of trade-weighted adjusted prices- has also supported exporters,

Whereas in 1989 Japanese banks were the real market giants, Due to increased asset prices, things are now more balanced and diversified. Main actors are from Toyota Motor Corporation And Sony Group Corporation For the operator of a casual clothing chain Fast Retailing CompanyPassing through companies that hold dominant positions in the giant semiconductor supply chain, such as Tokyo Electron Limited, (TES).

,Crossing this figure is quite symbolic“, Said Seiji NakataExecutive Director of Daiwa Securities Group Inc. About the records achieved. ,This is proof that Japan has changed,

(c) Bloomberg.-