On the 29th of December, 1989, the Japanese Nikkei 225 Index topped out and started sliding down into what was to become a 3-4 decade secular bear market, depending on your definition of a trend change.
What was generally believed to be an asset price bubble burst, causing a stock market crash followed by a banking crisis and economic stagnation. Deflationary pressures, demographic challenges (aging population & low birth rates), ineffective policy responses and corporate restructuring efforts and further financial doldrums including 2008 global downturn further hampered economic recovery and capital flow into equities from both domestic and international buyers.
Japanese equities however, noticeable to the astute observer, have turned up a while ago – as I wrote earlier in 2023, the market had given quite some opportunities for those willing to step out of the every-hyped US equity space. Over the first few days of the year 2024, the Nikkei 225, mirrored by the TOPIX (cumulative market cap of TSE equities), have again made new Highs after moving out of digestion patterns. The Nikkei in fact is not too far off its 1989 top with only 13% missing.
Interesting individual stocks from the computer peripherals industry include JP:6227 and JP:6862. The Sushi retailer Genki Sushi (JP:9828) is another example of a possible candidate for a new group of leading stocks.
Qualitative low-risk entry points are setting up in multiple places, and the next few weeks price & volume action in the leading stocks and indices will shine a light on to whether this advance is sustainable. If it is, I believe there are some good opportunities waiting – but don’t jump the gun. Let positive action pull you in.
