2025 is the year to stay bullish on Japan

YEAR-TO-DATE, Japan’s Nikkei 225 Index has been on a record-setting run and has returned nearly 20 per cent. This rally has been fuelled by a series of positive earnings reports – particularly from the nation’s three megabanks.

In fact, the top financial institutions have emerged as standout performers – with record earnings – as the Bank of Japan’s (BOJ) monetary tightening drove higher net interest margins.

This performance highlights the profound changes that are underway in the country’s economic and monetary landscape. For example, the central bank’s interest rate hike in March – the first in 17 years – appears to have put three decades of deflation decisively behind the country.