“When I look at the Korean stock market these days, it feels like I’m looking at Japan’s past. No matter what I do, it’s not increasing… Now Korea has more external assets and has become a net creditor, but the stock market is the only solution.” (Mr. A, stock market expert with 20 years of experience)
The United States, Germany, France, Taiwan, India, Australia… This year, stock markets in major countries around the world have been reaching record highs one after another, but the Korean stock market has been struggling to find upward momentum. Amidst the ‘pre-China’ trend that has swept across the world, nearly 9 trillion won in foreign capital has flowed into Korea. In terms of how big the amount is, it ranks 8th in terms of the amount of net purchases of KOSPI by foreigners in history. However, Korea’s KOSPI is still mired in negative territory. Instead of refreshing the all-time high, it runs backwards.
Graphics = Chosun Design Lab Yujin Han
However, Japan, where the ‘lost 30 years’ continues and stock prices have stagnated due to deflation (prices falling), is showing a 180 degree change this year. Japan’s representative index, the Nikkei Average, rose 37% (from 14th) over the past year, recording the highest gain in the world (NASDAQ second with 33%).
On the 16th, Japan’s Nikkei average rose 1.9% intraday to 38,865 yen, coming close to the all-time high (38,915) recorded during the boom in 1989. Japan appears to be the biggest beneficiary of the a ‘post-China’ policy that has swept across the world. Stefan Chan, CEO of InfoRich, a Japanese start-up, said, “Usually, I had to go on business to China or Hong Kong during the year-end and New Year holidays, but now there is no need to do that .” He added, “We receive many inquiries from foreign investors who want to know about the Japanese market, so we meet with customers almost every week. “There is,” he said.
On the 16th, Japan’s Nikkei Average exceeded the 38,500 yen recorded during the bubble economy 34 years ago, approaching an all-time high./Yonhap
Yeouido Securities covers the Japanese stock market breaking out of the dull 30-year range. Mr A, a stock market expert with 20 years of experience, said, “There may be many ways to overcome the period of population decline and stagnant growth, but Japan has implemented large-scale monetary easing and truly negative interest rate policies to stimulate the economy since the Abe administration As a result, “The ‘opportunity cost of failure’ has been reduced (even though the exchange rate has risen a lot), export performance has improved, and foreign tourism has filled domestic demand , and the economy has turned around,” he said.
This expert said, “As prices rose, it became very difficult for Japanese people, but because there were more jobs, they were able to make a living.” He added, “Korea and Japan have similar economic structures anyway, and they follow what Japan did and is doing.” “In the end, I think Korea will have no choice but to follow a policy line similar to Japan (very low interest rates and quantitative easing),” he predicted. For information, in Japan, the decline in the economically active working age population (15 to 64 years old) started in the 1990s, and in Korea, it started in 2015.
Graphics = Chosun Kwon Hye-in Design Lab
✅34 years after the Japanese bubble burst… What is the gap in the stock market?
So, what kind of trend did the Japanese stock market show after the bubble burst? Using December 1989 (¥38,915.87), when Japan’s Nikkei Average reached its highest historical peak, as a reference point, we compared the long-term performance of stock markets in four major countries, including the US, Germany, the UK, and Japan.
As a result, the US stock market was overwhelming at the top, with its stock price rising 14 times over the past 34 years. If you invested 100 million won in a fund linked to the US Dow index 34 years ago, you would have 1.4 billion won in your current account even if you stayed put (excluding dividends and fluctuations in foreign exchanges). The German stock market, which is reaching an all-time high this year, has also shown its presence by rising tenfold over the past 34 years. On the other hand, Japanese stock prices have remained stagnant for 34 years with little progress. Korea’s KOSPI rose 2.9 times over 34 years, a rate of increase similar to that of the UK. However, Korea’s gross domestic product (GDP) increased 10.5 times over 34 years.
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