Japan's equity renaissance

The Japan story is still in its early days. But the lesson it holds is that companies, regulators, and the broader market micro-system all need to continuously evolve

Two countries, India and Japan, dominated the conversation at the recent 3,000-people-strong HSBC Annual Global Investor Summit in Hong Kong. As readers are familiar with India, I will talk about Japan, where following decades of stagnation, Tokyo’s benchmark Nikkei 225 broke past its 1989 peak on February 22, 2024. While stable macro-economic, favourable geopolitical conditions and leaner balance sheets have energised its equity markets, governance reforms have had an equally important role to play.
 

Japan began focusing on governance reforms from the turn of the century, with a call for independent directors and board committees. Initially there was scepticism regarding