Nikkei 225 — The Breakout Story

Why the Rally?

Corporate Reforms: Stronger governance, higher shareholder returns, and record buybacks.

Ultra-Loose BOJ Policy: Negative rates and aggressive QE kept liquidity abundant.

Yen Weakness: A boon for exporters, driving earnings growth.

Valuation Reset: Japan Inc. re-rated from “cheap” to “attractive” in a global portfolio rotation.

Foreign Inflows: Global funds chasing the “Japan value” and reform story.

Future Outlook

Structural Breakout: Signals potential for a new secular bull market.

Tailwinds: Manufacturing leadership + AI/semiconductor momentum.

Risks: BOJ policy normalization could spark volatility; global slowdown or yen shock remain key watchpoints.

Bottom Line

After decades of stagnation, the Nikkei’s breakout is more than technical—it reflects Japan’s economic revival. If reforms and earnings momentum sustain, Japan could reclaim its place as a long-term equity powerhouse.