Japan’s Stock Market Hits New Highs

This week, the Topix reached a new all‑time high, crossing the symbolic 4,000‑point mark during the June 3 trading session. Since the start of the year, Japan’s main equity index has gained +15% (as of the June 4 close), outperforming both the S&P 500 (+10%) and the Stoxx 600 (+5%) over the same period.

The Japanese market is therefore confirming the strong momentum that began three years ago. Since January 1, 2023, the Topix has risen by about 100%, moving from around 2,000 to 4,000 points. This increase easily absorbs currency effects, with the yen down 24% against the euro and 18% against the U.S. dollar over the same period.

Our analysis

In addition to local initiatives introduced since 2023 to support the market – with the Tokyo Stock Exchange encouraging companies to avoid trading below book value – Japanese equities have also benefited recently from strong momentum around themes such as artificial intelligence and automation.

At the same time, companies continue to be supported by a healthy domestic economy. After several decades of deflation, Japanese firms have regained pricing power, helping sustain a high level of confidence among business leaders despite an uncertain global environment. Finally, the gradual normalization of Japan’s monetary policy, which began two years ago, is expected to continue and should provide further support for the financial sector.