Japanese stocks are still a bargain – investors should consider buying in

On a price/earnings ratio of 15.9, Japanese stocks are among the most reasonably priced in the developed world.

Consumers’ spending fell after the sales tax rose
(Image credit: Getty Images)

“The Japanese stockmarket is like a toxic blowfish,” writes Leo Lewis in the Financial Times. It has repeatedly proved to be “delicious only to fanatics”, while being “absolutely riddled with danger”.

Japanese equity connoisseurs were in for another nasty surprise this week. The Nikkei 225 index plunged by 4.5% on Tuesday. That caps a long period of underperformance. The Nikkei has gained 20% in five years, while America’s S&P 500 has jumped by 50%. At 22,600, the Nikkei is still far short of the 39,000 mark it reached in 1989 bubble.

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Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.