In fact, investors over the past year were rewarded with local currency equity returns that matched the all-flying Nasdaq and have even beaten the Nasdaq in the post-COVID-19 era.
For the corporate sector, this means a greater focus on margins and value, rather than simply volume. Households are bringing forward purchases, rather than delaying them. Hiromi Yamaji, the chief executive of the Japan Exchange Group, commented that “peer pressure or a nudge is a very important method to push people to go forward”.
According to Mizuho Securities, the net buying of Japanese stocks by companies reached a record high of ¥966 billion in May this year. Buybacks have increased to a rate that is slightly above that of the US.On JPMorgan estimates, FY2023 saw ¥9 trillion in buybacks and ¥4 trillion in sales of strategic shareholdings. Cross-shareholdings are also being dismantled, freeing up capital that can be used to improve returns.