TOKYO – The Nikkei 225 Average surging to 30-year highs adds an unpredictable element to the ruling party’s election in Tokyo.
The rally reflects optimism about a Japanese contest that starts Wednesday. Namely, that the next prime minister will be more concerned with reforms than the outgoing Yoshihide Suga.
The year-old Suga government was focused elsewhere, leaving investors hungry for moves to boost competitiveness in an economy watching China increase market share.
Unfortunately, little in the rhetoric from the four main candidates suggests policy shifts sizable or creative enough to justify this Nikkei surge. Will investors be left with buyer’s remorse?
Atsuto Sawakami, a legendary figure in Japanese equity circles, warns ultraloose Bank of Japan liquidity has investors running far ahead of steps to raise the nation’s economic game.