Nikkei 225 hit a new high, so what?

 

The Nikkei 225 has hit an all-time high, so what. You will have to go back decades to get to the current level so there is nothing special about this level other than it shows what an investment wasteland Japan has been for this period. The Topix index which is a broader representation of the Japan economy is still below previous highs. A bubble crashed, an economy slowed, policy did not work, and we can see the results. 

The only thing interesting is the size of the move over the last year which has shown strong returns, up 44% in a one year despite the current changes in BOJ monetary policy which is titled to tightening and the current slow growth.

What is notable is the strong weight on information technology which suggests that the Nikkei is being pulled by the same forces as large cap US indices. The behavior is different, but the underlying story is similar, so we are seeing a gain and almost a doubling of the IT sector weight. Japan is a tech side play.