The Nikkei has crossed 70,000 and the question everyone asks is 'why is it going up this much?' Karakama Daisuke, Mizuho Bank's chief market economist and Japan's go-to voice on the weak yen, answers with one table. He lined up 20 stock indexes since 2022 by how much they rose, next to each country's currency move and inflation rate. The pattern is blunt: the biggest stock market winners are countries whose currencies fell and whose prices rose the most. Japan fits it exactly. His conclusion: Nikkei 70,000 is not proof of a stronger Japan. It's the flip side of a chronically weak yen and inflation finally clearing out the deflation of the 'lost 30 years.' Stocks, land, everything priced in yen gets marked up while the yen itself buys less. And as long as the chronic yen weakness stays unresolved, he argues, the index grinding higher continues too. His one consolation for households: the new NISA arrived just in time, because holding stocks is one of the few ways ordinary savers keep up with this kind of repricing.
Why it matters · If Nikkei 70,000 is a currency phenomenon rather than an earnings story, then buying Japanese stocks and selling the yen are the same bet. That reframes every 'Japan is back' headline.