Japan's Stock Market Breakout Based on a Solid Foundation

Some of us have waited a quarter of a century for this. The Japanese stock market has finally pierced the “iron coffin lid” otherwise known as 1,800 on the benchmark Topix index. There have been four failed breakouts since Japan’s stock market bubble collapsed in 1990. Each time the reversal was quick and nasty, leading to lower lows and deep recessions.

With markets you never say never. External shocks, whether financial or geopolitical, can derail positive trends in an instant. Yet this time the market’s underpinnings look much more solid. Indeed, the Topix is lagging several other Japanese indexes. If it had kept pace with the Jasdaq Index of smaller, higher-growth stocks this century, it would be closing in on 3,000!