The Nikkei, the Tokyo Stock Exchange index, sweeps away its historic record of 1989
The Tokyo Stock Exchange beats its historic record reached in December 1989. It rose 2.19% this Thursday to 39,098 points, just above the 38,957 points of December 29, 1989, the highest level in its history.
It took 34 years for the Tokyo Stock Exchange to recover from the bursting of its financial and real estate bubble which shortly after plunged the country into more than three decades of lost growth.
The Tokyo Stock Exchange, February 22, 2024 during the new record for the Nikkei index.
© ISSEI KATO / REUTERS
By: RFI Follow
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With our correspondent in Tokyo,
Frédéric Charles
The Tokyo Stock Exchange is benefiting from the misfortunes of the Chinese stock markets and political tensions between China and the United States.
It serves as an alternative to foreign investors who have withdrawn their funds from China and invested them in
Japan
.
They are attracted by the weakness of the yen which artificially inflates the profits of Japanese companies made abroad.
Since 2020, there has also been the Warren Buffett “effect”.
The famous American investor has invested heavily in the largest Japanese trading houses.
He is struck by the profitability of Japanese companies and the improvement in their governance.
Finally, they are interested in their shareholders.
A stock market cheaper than in Europe and the United States
Japanese companies have enormous cash reserves, notes Nicholas Smith, the economist at CLSA Bank in Tokyo.
They are restructuring, increasing the number of mergers and acquisitions.
And their stock market value remains cheap compared to the American and European markets.
Japan would be at the dawn of a new era.
The Japanese are gradually giving up their deflationary mentality.
They are starting to accept price increases.
Companies agree to significant wage increases.
The Tokyo Stock Exchange should continue its improvement.
Not content with having already jumped 28% in 2023 – its best annual performance in ten years – the Nikkei has climbed further spectacularly since the start of this year (+17.5%).
After all, the Nikkei index has only returned to the level it was 34 years ago.
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