Japan’s Nikkei 225 index has risen by 56% since the start of 2023. It went on to an all-time high in March 2024, surpassing the previous record set in 1989. Foreign inflows into Japanese stocks topped ¥6.2 trillion ($43.4 billion) in 2023, breaking a record that hasn’t been touched since at least 2014.
While the shift in global investor portfolios from China to other Asian countries has undoubtedly played a role, the Tokyo Stock Exchange’s (TSE’s) own reform, focused on prompting change at companies struggling with low share prices at persistently low price-to-book ratios (PBRs) has been the key driver behind Japan’s resurgent capital market.
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