The return of Japan

Markets: Corporate Japan is back on track - at Moneyweek.co.uk - the best of the week's international financial media.

Many analysts think that Japan's recent economic recovery is another false dawn - just as it was in 1997 and 2001. Jonathan Allum disagrees. Corporate Japan is back on track, he says, and a bull market in equities could be on the way.

A dismal historyIt now seems barely credible, but there was a time when Japan had the largest, most dynamic stockmarket in the world. In 1989, the Nikkei 225 all but reached 40,000 and everyone expected that within a few years it soar above 100,000. But it never happened. The market stumbled, the economy crumpled, and the go-go 1980s became the stop-stop 1990s, a grim attritional period, a bit like World War I, only more than twice as long (and minus the poetry). There have been glimmers of hope since, but all the dawns turned out to be false. In 2003, the Nikkei finally fell below 8,000.

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