Japanese stocks just clinched their best first-half performance since the dawn of “Abenomics” in 2012, but some doubt whether Japanese stocks can continue to outperform U.S. and European stocks during the second half of this year.
It’s the latest milestone in what has been a banner year so far for Japanese stocks as the typically staid Japanese equity market sprang back to life. The last time Japanese stocks were rallying like this, former Prime Minister Shinzo Abe had just been elected in 2012 and was promising an economic agenda anchored in ultra-loose monetary policy, fiscal stimulus and structural reform.
Japan has enjoyed relatively low inflation compared with the U.S. and Europe, helping to make Japanese assets into a haven from rising prices around the world in the wake of the pandemic and the Ukraine war.Japanese stocks have also benefited from the star power of the Oracle of Omaha. Data released Friday showed the Tokyo Consumer Price Index eased to 3.1% in June on a year-over-year basis, down from 3.2% during the prior month. Earlier this year, core prices hit their highest level in more than four decades, official data show.