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By Bart Van Craeynest, Chief Economist, Petercam
Japan has been an eternal promise for investors. We all know the stories about the ‘age of Japan’ in the 1980’s. On December 29, 1989, the Nikkei 225 reached an all-time high of 38,915.87 points, having risen six fold during the decade. Subsequently, the index lost nearly all of these gains, closing at 7,054.98 on March 10, 2009. That is a loss of nearly 82%.
The stock market peak also marked the start of a deflationary period and ensuing economic weakness in the country of the Rising Sun as of 1990. Debt levels soared, banks were artificially propped up (zombie banks) because of massive non-performing loans and the country was mired in deflation for decades on end.
For the past few...
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