Japanese Investment Commentary and Market Outlook February 2024
‘Surge to Record High’
The Japanese equity market has reached a fresh record high, surpassing the previous peak set in 1989 during the bubble economy. The surge in Japanese stocks can be attributed to the attractiveness of the market compared to global markets and the underweight position of overseas investors. Overseas investors showed confidence in the Japanese market, redirecting their investments to Japan. The TOPIX and Nikkei 225 indices saw significant gains, and sectors like Transportation Equipment, Insurance, and Banks performed well. The TOPIX 12-month forward Price-to-Earnings ratio also increased, and large-cap and growth stocks outperformed small-cap and value stocks.