Greetings to all for the New Year. I wish everyone health and prosperity for the year ahead.
The year 2025 saw the Nikkei 225 break through the JPY 50,000 mark, with TOPIX also hitting a new record at 3,436 points. Along with an air of expectation for positive results and reforms at Japanese listed companies, last year I felt the “shift from savings to investment” really beginning to gather steam, aided strongly by the new NISA.
Since last year, which marked ten years since the Corporate Governance Code was first introduced in 2015, we have been exploring the next set of revisions with the Financial Services Agency.
Our request for management that is conscious of cost of capital and stock price has also inspired proactive efforts at listed companies, and there is a noticeable shift in how companies are thinking and acting.
However, reform is an ongoing effort. This year, we will continue to develop the market environment and communicate with domestic and international stakeholders to raise the appeal of the Japanese market for investors both in Japan and abroad.
In addition, we will implement the second stage of revisions to the TOPIX universe, as planned, in October this year.
These revisions will improve TOPIX’s functionality as an investable index while maintaining its main feature – representativeness of the market.
From the periodic review in October 2026, TOPIX constituents will be chosen based on market capitalization, regardless of their listing segment. I hope that this will be an incentive for companies listed on the Standard and Growth Markets to aim for improvements in corporate value, as well as those on Prime.
Next, I would like to touch on this year’s market.
To cast our eyes over the market environment, there are still many risk factors. Attention is needed to, among others, geopolitical risks such as in Ukraine, the Middle East, and East Asia, trade friction between the U.S. and China, global financial policy trends and their impact, and trends in financial results at Japanese companies.
On the other hand, an exit from almost 30 years of a deflationary economy is looking more and more definitive, and there is growing momentum in wage growth with the background of ongoing price rises.
Japan’s economy and companies are gathering attention from domestic and international investors to an extent never seen before.
I am feeling a strong level of interest in the Japanese market, with investors continuing to indicate their approval of movements such as the government’s efforts to promote Japan as a leading asset management center, corporate governance reform, the new NISA, and Japanese companies’ financial results as well as their efforts in capital and growth investments.
The consensus seems to be that this year’s stock market will continue on last year’s bullish trends.
2026 is the Year of the Horse. Japanese financial proverbial tradition says that markets slide down in the latter parts of these years, but with strong financial results expected at Japanese companies and Japan moving toward a strong economy thanks to a rebound in consumer spending, active growth investment at companies, including in human capital, and the government’s growth strategy, I have strong hopes that the market will in fact slide up.
Horses are famous for their strength and speed, but no matter how swift a horse may be, it cannot make its journey in just one leap – it must progress step by step. I believe that the Japanese economy this year will move forward steadily, step by step, while pushing determinedly toward growth.
I hope that 2026 can be an even better year for the Japanese financial and capital markets and for everyone.
Director & Representative Executive Officer, Group CEO
Japan Exchange Group, Inc.
