Nikkei Peak Signals It’s Different This Time for Japanese Equities

Well I never. Seeing the Nikkei 225 index make a new high, 34 short years later, is a bit of a milestone. The world’s second-largest stock market has got its mojo rising at last. After quadrupling over the past decade, and rising 16% in 2024 so far, the burning question is whether this is another bubble moment or genuinely part of a proper renaissance? Forgive me for making this personal, but I’m a believer!

Having started as a graduate trader in London at a Japanese bank, I was plunged right into the tail end of the 1980s real estate-driven equity boom. Thankfully, I skipped most of the remorseless unraveling of the Japanese miracle for the next 15 years, putting it down to a surreal first-job experience. Even as recently as 2012, after a decade of working at other Japanese banks, including a spell in Tokyo, the economy there reverted toward deflation, with the stock market again condemned to irrelevance. But once an old Japan hand, it’s with you for life, so faith has returned.