Japan’s benchmark index continues to scale new peaks, rising briefly above the record closing high level reached at the height of the Japanese asset bubble in 1989.

The Nikkei Stock Average
was 1.7% higher at 38,924.88 for a brief moment on Thursday morning, topping the record closing high of 38,915.87 set on Dec. 29, 1989. The index was recently up 1.6% at 38,868.56, compared with the intraday record high of 38,957.44, also reached on the same day in 1989.

The benchmark index had climbed 14% in the year to date through Wednesday, after having risen 28% in 2023, driven by the return of modest inflation, improvements in corporate governance and a weaker yen, which boosts the value of corporate profits earned overseas in yen terms.

The Tokyo Stock Exchange in March last year called on listed companies to improve returns on shareholders’ capital and correct discounts reflected in their share prices, prompting a number of companies to increase dividends and share buybacks. The move added to the exchange’s efforts in recent years to bring in more independent directors onto corporate boards in a bid to improve their oversight of management.

Marred by years of deflation and slow growth, the Japanese stock market has lagged behind others over the past decades. The Dow Jones Industrial Average has increased more than 14 times since the end of 1989.

However, the Japanese market, along with India’s, has recently attracted increasing amounts of global capital, offering an attractive alternative to a Chinese market mired in a slump due to the country’s property-sector woes and a regulatory crackdown on the tech industry.


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