Did Japan Stock Market Miss its Chance for a Growth Year?

(The Express Wire via Comtex)

Back in February, before the Coronavirus pandemic became the only factor the world would be revolving around, many investors thought that this could be the year when Japan stock market would blossom. Although its global economy still had some issues, some analysts in the UK thought there were good opportunities to be found in order to diversify. Let’s take a closer look at Japan’s stock market.

  • The Tourism Industry

One of the reasons why specialists thought Japan stock exchange might see flourishing days this year was because of the Olympic Games that were to be held this summer. The fact is, ever since Tokyo was chosen in 2013, the number of visitors has been growing steadily. As an example, in 2018, it rose by almost 9% over the previous year. The government was hoping to reach 20 million visitors per year by the time the Olympics would come around but tourism in Japan has already surpassed that number. In fact, they almost doubled the expectation, as this year was supposed to bring in more than 40 million tourists to the country.

Of course, that was before the COVID-19 crisis. Nowadays, the streets of the major Japanese cities are empty of visitors and a lot less crowded with locals too. The blossoming of the cherry trees, an important yearly event in the life of the natives and a sight that many come to see from everywhere around the world, happened without gathering in the parks to admire their beauty. The renewal time of the year simply did not happen, much like the economy’s rebirth.

  • From Extreme Growth to the Lost Decade

Not that long ago (a little over thirty years), the value of the Imperial Palace in Japan was worth more than all of the housing market in the State of California. The country’s stock market had been growing exponentially during a decade, moving from 6,500 points to 39,000 by the end of 1989. At that time, everyone seemed to think that Japan was to become the center of the world. But sadly, it was not meant to be. Suddenly the economy crashed thanks to a weak GDP growth, deflation and a collapse in asset prices that simply did not seem to want to stop.

In Japan, this period is called “The Lost Decade”. However, it’s been lasting for almost thirty years now. The country’s stock market today is only trading at half the value that it was at its peak in 1989, and the GDP is still below its level back in 1995.

Press Release Distributed by The Express Wire

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