Japan’s equity market history is marked by extremes. Following the asset bubble of the late 1980s and its dramatic collapse, the market entered a prolonged “lost decade”, weighed down by deflation, balance-sheet repair and weak domestic demand. While periods of recovery followed, they were often short-lived and vulnerable to global shocks.
After decades of disappointment, Japanese equities are back on investors’ radar. Long perceived as a market defined by deflation, weak profitability and structural inertia, Japan is now undergoing a combination of cyclical recovery and structural change that is reshaping its investment case. The question for global investors is no longer why Japan failed in the past, but whether current conditions justify renewed confidence today.
