The rally in Japan’s stock market may have stalled recently, but the Nikkei 225 index is still near record levels. Both economic and policy-related factors should drive it to new highs.
The index hit a closing record of 40,109 earlier this month, decades after its previous record close at 38,915 in 1989. The Tokyo market has gained roughly fivefold since it hit bottom in 2009 at some 80% below its peak.
Although the Nikkei has seen a mild dip to just under 39,700, it is still up about 18% for the year, mostly because investors have been willing to pay a higher multiple of anticipated near-term earnings for stocks. The Nikkei trades…
