News On Japan

Tokyo Stock Market Hits Post-Bubble High for the Fourth Consecutive Day Amid New NISA System Adoption

TOKYO, Jan 13 (News On Japan) - The Nikkei Stock Average reached its highest level since the bubble era for the fourth consecutive day on Friday, closing at 35,422.95, surging by more than 2,000 points over the past week on the back of changes to Japan's investment rules.

According to Shingo Ide, Chief Equity Strategist at the NLI Research Institute, "The effect of the new NISA system might account for around ¥500-600 billion of this rise."

NISA, short for Nippon (Japan) Individual Savings Account, allows tax exemption on investment gains. Starting this January, the investment limit has increased from ¥1.2 million to ¥3.6 million annually, encouraging more people to start investing.

"When individual investors purchase foreign stock funds, they convert yen into dollars in the process. This results in a weaker yen, which improves the profitability of Japanese export companies, subsequently leading to an increase in Japanese stocks, Nikkei averages, and TOPIX," Shingo Ide explains.

Despite these market gains, Japanese households still hold a significant portion of their financial assets in cash and deposits, totaling ¥1,000 trillion.

"While there may be potential corrections next week due to the rapid increase in stock prices so far, in the long run, we can expect gradual growth," Shingo Ide concludes.

Source: ANNnewsCH

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