Editor’s Note
This article examines the exceptional performance of Japanese equities in October, which saw the Nikkei 225 surge 16.6% to successive record highs, significantly outpacing other major global indices.
The Japanese stock market performed exceptionally well in October. The Nikkei 225 Stock Average rose 16.6%, and the TOPIX (Tokyo Stock Price Index) also increased by 6.1%. Outperforming the S&P 500’s gain of +2.2%, both indices reached new all-time highs.
The monthly gain was the highest since November 2020 (when news of vaccine development progress was welcomed amid a resurgence of COVID-19 infections). Expectations following the inauguration of the new Takachi administration contributed to Japanese stocks outperforming the S&P 500.
However, the strong market performance is not limited to Japan. Major U.S. indices also hit record highs. For instance, in Asia, South Korea and Taiwan; in Europe, the UK, Italy, and Spain; and in South America, Argentina and Brazil, among others, reached new highs. As a result, the global stock index also set a new record (see Chart 1).
The following page examines the background of the strong stock performance and predicts the future direction of stock prices.
