Japan Stocks Come Back to 1989 Level, But

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Japan Stocks Come Back to 1989 Level, But...

What You Can Learn from Japan's Failure.

By Ben Wada on February 24,2024


Something about my home country Japan for a change. 


The prime indicator for Japan Stocks, the Nikkei Stock Average or Nikkei 225, came back to the all-time high level since 1989 on February 22. 

The below chart, from Nikkei Asia, shows it.

 


It was good but it took so long  to come back.

The comeback is not totally a symbolic moment for the economic power of the island nation to come back.


At least for Japan, the stock prices are no more an indicator of whether the business goes better or worse.

In 1989, Japan’s GDP was the second in the world, just after the US.  

In 2024, it would be the fourth, following the US, China, and Germany.

For some 30 years, Japan has remained at the same place while many nations in the world have, fast or slowly, grown in economy. 

 

Lesson Should Be Learned by Other Nations


When the economy goes from fast-growth to no-growth,

  • People’ s hope for the future is becoming less and less;

  • The society has a smaller birth rate and longer living old generations; 

  • The government taxes younger generations more to support the medical cost of elders.


Of course, democratic government cannot do it strongly, instead it increases government debt. 

Japan’s government debt to GDP has reached 260%. 

Tremendous amount of government debt is a curse for the people to have a brighter future.(Government is just an empty vessel. Only people in the nation can repay the debt.)


And they face difficulties in making even modest economic growth.

And repeats to go to worse situations.


Economic growth is a must for modern nations. 

I hope the other nations such as fast growing Asians learn the lesson from Japan's failure.
Location: Japan

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