Japan’s Nikkei beats bubble-era mark

JAPAN’S Nikkei 225 finally broke through a record high set just before the country’s asset bubble catastrophically burst in the early 1990s.

The index of blue-chip stocks hit a peak of 39,156.97, beating the record of 38,957.44 set in December 29, 1989, before easing to 39,098.68 points at the end of trading yesterday, its highest closing level.

By doing so the Nikkei broke through the levels seen during the boom years of 1985-1989 when it quadrupled in value and Japanese assets soared.

Tokyo property prices at the time were hundreds of times more than in Manhattan, golf club memberships would cost millions of dollars, and bankers would sprinkle gold dust into their drinks.

Flush with cash and aided by the strength of the yen, Japanese firms also went on an overseas shopping spree, with Sony taking over Columbia Pictures and Mitsubishi purchasing New York’s landmark Rockefeller Center.

Japanese investors became big buyers in the international art market, setting new records for Impressionist painters like van Gogh.

But a crash came in the early 1990s as investors fled in panic, with the Nikkei roughly halving in 1990 and real estate prices falling sharply.

This ushered in Japan’s “lost decades” of economic stagnation, deflation and ballooning national debt.

Its stock market was hit by global downturns such as the burst of the dot-com bubble in the early 2000s and the 20082009 financial crisis.

Shares began gaining momentum again around 2013 and picked up speed in the past few years, growing 28 percent in 2023 and around 17 percent so far this year.

“Share prices are not so expensive compared to the ‘bubble’ years if you compare the data,” Asuka Sakamoto, chief economist of Mizuho Research & Technologies, said.

Yesterday, the market was boosted by US chipmaker Nvidia’s bumper results issued after Wall Street closing.

(AFP)