Warren Buffett Brought Japan Back, How Long Will It Last in 2024?

Ryan_Z0528
02-22

Japan's Nikkei 225 index reaches all-time high, closing above 39,000 for the first time after 34 years, driven by chip-related stocks in a powerful 2024 rally.

The Nikkei has risen 17.5% since the start of the year, making it the world’s best-performing major index, as a falling yen lures foreign investors.

Traders celebrate with standing ovations and cheers. $iShares MSCI Japan ETF(EWJ)$ $Japanese Yen - main 2403(JPYmain)$ $ProShares Ultra MSCI Japan(EZJ)$ $iShares MSCI Japan Value ETF(EWJV)$ $iShares Currency Hedged MSCI Japan ETF(HEWJ)$ $Franklin FTSE Japan ETF(FLJP)$

Nvidia's strong earnings fuel the final push. Nomura's CEO cites confidence from Nvidia's results.

This surpasses the index's 1989 peak when 15 Japanese companies ranked among the world's top 20 by market capitalization.

Warren Buffett Brought Japan Back

In 2023, Buffett's addition of positions in General Trading Company can be regarded as a trumpet for the Nikkei Stock Average. But to be more precise, foreign capital is an important energy in the Japanese stock market and an important driver of this bull market.

By 2024, the "cost-effectiveness" advantage of the Japanese stock market after a round of rise is no longer so obvious, but overseas funds are still pouring in.

Nikkei reports show that overseas investors net purchased more than 2 trillion yen of spot Japanese stocks in January 2024. And these overseas investments are not just short-term arbitrage hedge funds, but also include "Asian, European and American pension funds that invest on a multi-year basis."

By February 2024, the buying pace of overseas investors has not stopped.

An interesting phenomenon has emerged: as the index approaches a historic high, some Japanese financial institutions are even selling out, and some retail investors are also wandering around.

34 years of pain for Japanese stocks $SGX Nikkei 225 - main 2403(NKmain)$

  1. Dec 29 1989: Nikkei 225 hits then-record high of 38,915

  2. Mar 27 1990: Property bubble pops after regulation to curb loans to developers

  3. Aug 1 1990: Bank of Japan headline interest rate hits 6%

  4. Jan 17 1995: Kobe earthquake

  5. Mar 20 1995: Sarin gas attack in Tokyo subway

  6. Jul 1 1997: Asian financial crisis begins

  7. Oct 23 1998: Long-Term Credit Bank of Japan collapses

  8. Jan 1 2006: Takafumi Horie, CEO of internet group Livedoor, arrested

  9. Jul 15 2008: Lehman Brothers on the brink in US

  10. Mar 11 2011: Tohoku earthquake and tsunami

  11. Dec 26 2012: Shinzo Abe becomes PM and launches 'Abenomics'

  12. Feb 1 2016: BoJ introduces negative interest rates

  13. Feb 1 2020: Start of Covid-19 pandemic

  14. Jan 1 2023: Tokyo Stock Exchange starts campaign to raise corporate valuations

  15. Feb 22 2024: Nikkei 225 hits record high of 39,098

33-year high! Will you allocate Japan shares like Buffett?
Japanese shares hit three-decade high not seen since 1990 on Monday as strong earnings and offshore demand fuelled a three-week winning streak. -------------- Will you allocate Japan shares like Buffett? Will you buy Japan companies or ETFs?
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