Era of the Rising Sun?

Japan's Nikkei Index just hit a 29 year high.
Jennifer ChanNov 11,2020,21:24

Continuing the winning streak, Tokyo's benchmark Nikkei hit a 29-year high on the vaccine announcement from Pfizer (NYSE: PFE) and hopes for a faster-than-expected global economic recovery.

The 225-issue Nikkei Stock Average ended up 444.01 points, or 1.78% from Tuesday, closing at its highest since June 1991.

Known as the "lost decade", the 1990s were all downhill after that summer of '91. The nation saw its asset-inflated bubble economy burst and the rest is history. A Biden win also propelled stocks and enthusiasm for what analysts view as a steady hand in global geopolitics.
Tourism and real estate sectors saw buying, as well as other sectors that have been ravaged by the pandemic. Take travel agency H.I.S and developer Mitsui Fudosan, which increased by 3.3 and 5%, respectively. Bank stocks also jumped on the overall optimism.

"We feel that Japan is becoming very interesting again,” said Patrick Ghali to Reuters.

Ghali is the managing partner of hedge fund advisory firm Sussex Partners, which turning towards the island nation's equity markets and some of its undervalued companies.

“It feels like it’s the last fundamental place left, if you look at valuations.”

Foreign funds have been pouring into Japanese equities since earlier this year. While the Chinese equity market is t is the 400-pound Asian gorilla drawing investor attention in the West, investors might not want to sleep on Japan as it awakes from its economic slumber. Structural problems like an aging population compounded by a falling birth rate (The number of babies born in 2019 fell by an estimated 5.9% this year, to 864,000) and a population largely averse to immigration make Japan a nation that will continue to maintain any lasting economic growth. But there are great companies in Japan, and all signs point to an equities market worth betting on. Look to some Japan-focused ETFs to play the nation's resurgence.

Topics:japan stocks, equities, nikkei