Japan’s Recovery Agenda

After hitting rock bottom the Nikkei is back on track.

With a massive change in sentiment towards Japan as an investment destination, global investors are suddenly sitting up and taking notice. The Nikkei 225 index has risen from under 9,000 to around 14,000 in less than nine months – a striking gain. No other mainstream stock market has performed anything like as well since Q4 2012.

After more than 20 years of grinding deflation, a new government under Prime Minister Shinzo Abe has been elected with a clear mandate to change direction. Despite many false dawns in the past, investors appear to have convinced themselves that the new reflationary policy could be the real deal.

The new strategy has three main elements – the 'arrows'.