vMany investment bankers in Tokyo still can't quite believe it. For three decades they had to concentrate on one of the most boring stock markets in the world. The Japanese stock exchange has a whole range of global companies to offer, including Toyota, Nissan, Sony and Nintendo.
But the companies were often difficult to access, especially for foreign investors. The Japanese economy follows its own rules on many issues; even large corporations only publish important information in Japanese.
And then there was the big crash of 1989, during which both the hot stock market and the real estate market in the island nation collapsed. If Asia, then China or the emerging tiger states of Southeast Asia – that was the motto for a long time.
But now it is primarily the influx of foreign investors that has pushed Tokyo's leading index Nikkei 225 above its previous high from 1989 for the first time during trading on Thursday, after an impressive upswing over the past year and a half. With 39,029 points, he clearly broke his previous highest final score of 38,915.87 points. In the first three weeks of the year alone, foreigners poured a net $10 billion into the Japanese stock market.
“Overwhelming demand”
And experienced stock traders rub their eyes. “The number of inquiries that my team has received has literally increased exponentially in the last few months – it is overwhelming how great the demand and interest in Japan is at the moment,” says Shinji Ogawa, who works for the American investment bank JP Morgan works in Tokyo.
Goldman Sachs' competitor is also caught up in Japan fever and has just announced a list of “Seven Samurai” – seven Japanese stocks that it considers to be as strong as the “Magnificent Seven” of the American tech industry. In addition to the well-known car manufacturers Toyota Motor and Subaru as well as the corporate conglomerate Mitsubishi Corporation, the list of chip manufacturers includes Tokyo Electron, as well as the three suppliers of various devices for the semiconductor industry, Advantest, Disco and Screen Holdings. According to Goldman Sachs, they all have highly liquid stocks that have performed well both since the beginning of the year and in the past twelve months. And all seven have not reported any losses since at least 2020.
Nvidia numbers push chip values
The Japanese stock market also owes its recent rise to record levels primarily to the booming chip industry. In the wake of the strong business figures from the American chip manufacturer Nvidia, Japanese chip stocks also rose sharply.
Many investors are now asking themselves: Is it still worth getting involved now or is there a risk of a sudden crash like in 1989? Most bankers agree: the situation today is different than it was 35 years ago.
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