Japan has been one of the world’s largest and most advanced economies for decades. However, unlike some of its East Asian counterparts, its demographic challenges mirror those faced by developed nations in Europe. Low birthrates and a ballooning population of seniors has put increased strain on Japan’s political, social, and economic life. Despite these challenges, Japan has frequently risen to the occasion.
The Nikkei 225, or the Nikkei Stock Exchange, is a stock market for the Tokyo stock exchange. The Nikkei Index has climbed 32% year-over-year to just over 35,000 points as of close on Wednesday, January 10. Meanwhile, the index has jumped 6.7% over the past month.
What has been the key driver for the Japanese market over the past year? The top five constituents of the Nikkei 225 make up over a quarter of the index’s total weighting. Those top five constituents are Fast Retailing Co., a multi-billion-dollar retailer with locations around the world. Softbank is another top five holding on the Nikkei 225. Daikin is the third familiar name, and the largest air conditioner manufacturer on the planet.
The Asia-Pacific finished strong in 2023 and has continued that streak into the early part of the New Year. Japan has been an early success story and will be worth monitoring as its top index has soared to new heights.
