It has taken thirty-five years for the Japanese Stock Exchange to escape the pernicious effects of the country’s financial bubble that burst in the late 1980s. The Nikkei 225 index has returned to historical highs above 40,000 points, after a long journey of deflation, negative rates, and continuous intervention in the financial markets by the Bank of Japan (BOJ) through buying bonds and stocks.
Last year inflation returned to that Japanese economy, and it is expected that this year, at last, the BOJ will raise interest rates, which have been anchored at –0.10% since 2016.
“After three decades of low prices, and even of deflation,…