Connect with us

Japan

Nikkei’s 2017 rally heralds that Japan Inc. is back

Japan’s recovery has been driven by ultra-loose Bank of Japan policies and a buoyant global economy

Avatar

Published

on

Little is afoot in Tokyo to create the sustainable domestic demand-led growth that has eluded the Japanese economy for two-plus decades

The Nikkei’s 19% rally isn’t completely irrational. Companies are cash rich and underpinned by an economy enjoying its best run in 16 years, unemployment at 23-year lows and investment banks heralding that Japan Inc. is back.

The missing link, though, is wages. Average monthly cash earnings rose by just 0.6% in October, year-on-year. Worse, labor unions are lowering their ambitions for bigger gains in 2018.

This disconnect raises valid questions about whether Nikkei bulls ran ahead of economic fundamentals not just this year, but in the last few.  Since Prime Minister Abe’s tenure began in December 2012, the Nikkei has gained an eye-popping 128%.

Source link

Advertisement
Comments

Most Viewed

Subscribe via Email

Enter your email address to subscribe and receive notifications of new posts by email.

Join 12,559 other subscribers

Latest

Trending