The Japanese stock market as represented by the benchmark Nikkei Average Index at 17725 on Friday and is up by 1.6% year-to-date.Nikkei reached a peak of about 40,000 back in the late 80s and has not reached that level again in the more than two decades since.
The following charts show the long-term return of the Japanese stock market from 1921:
Click to enlarge
Source: That was yen, this is now, FT Alphaville
Here are few points on Japan:
- The unemployment rate is very low at just 3.4% according to most recent data.
- Households’ savings rate is generally high compared to other developed countries but recently has declined to below zero.
- Similar to Germany, Japan’s economy is an export-oriented economy. The auto industry is one such industry that depends heavily on overseas sales than the domestic market.
- Japan is largely a homogeneous society and immigration is highly restricted.
- Foreign investors are major investors in the equity market. Hence the movement of the market is related to how these investors view the Japanese economy and the performance of companies.
- iShares MSCI Japan ETF (EWJ)
Disclosure: No Positions