Japan’s TOPIX index approaches highest level since 1990

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(Bloomberg) – Buying by overseas forces and improvements in corporate governance led by Japan supported stock prices, supporting Japanese stock prices close to levels not seen since the bursting of the bubble economy, and Japan’s TOPIX has risen since August 1990. It edged up towards a high closing price of .

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The baseline rose 0.6% to 2,109.21, within 1% above the previous high recorded in September 2021. The TOPIX has outperformed the S&P 500 this year with further tailwinds from the resumption of yen depreciation as the Bank of Japan continues its policy. Monetary easing policy and solid earnings of domestic demand-oriented companies.

Warren Buffett’s renewed support for Japanese stocks has raised hopes that foreign investment will return. Foreign traders bought a net $22 billion worth of domestic stocks and futures in April as record inflows continued.

“There are many justifications for a bullish stance on Japanese equities,” Goldman Sachs strategist Kazunori Tatebe said in a note. ‚ÄúSpecifically, we are paying attention to the solid fundamentals compared to stocks in overseas markets, and we believe that expectations for structural changes and reforms may further boost Japanese stocks. .”

Japan’s rally brings another catalyst to earnings: stake acquisition

At the same time, buybacks have bolstered sentiment after the Tokyo Stock Exchange asked companies trading below their book value to outline their capital improvement plans. Mitsubishi Corporation announced on May 9 that it plans to buy back its own shares worth up to $2.2 billion. Last month, IT companies Hitachi and Fujitsu announced huge share buybacks.

A sub-gauge that tracks companies ranging from steel makers to airlines has risen this year as investors pick stocks with lower valuations and better governance potential. Even beer stocks are seeing a renewed focus on prospects of rising prices, tax incentives and a recovery in tourism.

–With the cooperation of Mr. Hideyuki Sano and Mr. Yasutaka Tamura.

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