The Japanese stock market has once again surprised analysts and investors. Like a phoenix rising from the ashes, it has rebounded to prove its strength. According to Bloomberg, Japanese stock indices have recovered to levels seen before the recent drop.
Japan’s equity market has fully erased its dramatic decline of August 5th, which was the steepest since 1987. Thus, the market situation has stabilized. On August 13, the Nikkei 225 index climbed back to its pre-crash levels.
Analysts attribute such a sharp recovery in the Japanese stock market to a weaker yen and revised earnings estimates of corporates whose stocks had been hit by panic selling. However, the Nikkei 225 and Topix indices are still 8% below their levels posted at the end of July and 13% below their historical peaks reached in June 2024. Nevertheless, Bloomberg notes that the situation is improving.
Rakuten emerged as the best performer, with its shares rising by 9.22% on lower operating losses. Tokyo Electron, a major semiconductor manufacturer, saw its stock increase by 6.16%.
According to Ikuo Mitsui, a fund manager at Aizawa Securities, investors continue to buy up undervalued stocks.
Notably, on August 5, Japan’s benchmark Nikkei 225 and Topix indices lost more than 12% in a single day, leading to significant declines in global markets. Over the past three weeks, global market capitalization has shrunk by $6.5 trillion, Bloomberg estimated.
