It has been exactly a year since the new NISA scheme was launched. As the Japanese economy begins to move toward inflation and individuals become more aware of and interested in investment, I feel that after a long wait, there has now been steady progress in the “shift from savings to investment.”
We at JPX have also been working to support these trends by providing platforms that enable easier investment for everyone. Last year, as well as beginning discussion on issues around and possible ways to enable smaller investments through the Study Group on Small-Size Investments, in November we acted to expand trading opportunities and improve transparency in closing price formation through the extension of trading hours and the introduction of a Closing Auction Session.
Also, many companies have begun to take constructive action, including disclosure, in response to our March 2023 request for “action to implement management that is conscious of cost of capital and stock price,” earning positive evaluations from investors both in Japan and abroad. However, reform is still only at the starting line. What we are aiming for is a market where the default is for listed companies to work to improve their medium- to long-term corporate value with an active consciousness of capital cost and stock price. This year, we will continue to push forward with our calls for action at listed companies and developing the market environment, among other things, in order to raise the appeal of the Japanese market for investors both in Japan and abroad.
To end, I would like to talk about this year’s market.Looking at the environment surrounding the market, there are various potential risks, but we are paying particular interest to the policy movements of the new Trump administration. Attention is also needed to geopolitical risks including in Ukraine, the Middle East, and East Asia, the unpredictable Chinese economy, global financial policy trends and their impact, and trends in financial results at Japanese companies.
On the other hand, the Japanese economy is approaching an important juncture, not least in exiting from the past 30 years of deflation in the midst of ongoing price rises and growing momentum in wage growth. Furthermore, stakeholders including Japanese and foreign investors are continuing to give their approval to the Japanese government’s efforts to further develop the economy and financial and capital markets, such as corporate governance reform, enhancing the asset management industry, the new NISA scheme, and the Startup Development Five-year Plan. There is also an ongoing high level of interest in the continued strength of company results overall, in our ongoing corporate governance reforms, and in our efforts to support sustainable growth at listed companies.
Given these points, my impression is that many people are expecting this year’s stock market to be on a bullish trend.
2025 is the Year of the Snake. Japanese financial proverbial tradition says that markets hit a peak in these years, but snakes also change and grow through repeated shedding of their skin. I look forward to seeing the market throw off last year’s skin and emerge even greater this year.
I hope that 2025 can be an even better year for the Japanese financial and capital markets and for everyone.
Yamaji Hiromi
Director & Representative Executive Officer, Group CEO
Japan Exchange Group, Inc.
