Deep Dive — History, the Current Rally, and How Indians Can Actually Invest

Japan's Stock Market Broke a 37-Year Curse

Here's the part involving your money. Two weeks ago, Japan's stock market crossed a line nobody alive in finance has ever traded through. Not once since 1989 — not during the dot-com boom, not during 2008, not during the pandemic rally. And buried inside this comeback is a quieter twist almost nobody is talking about: there's a real chance you, sitting in India, already own a piece of this story — without ever buying a single Japanese share.

70,020 Nikkei's all-time
intraday high, June 16

162.83 Yen's 40-year low
vs. the dollar

16%/yr Nikkei's 10-year
annualized return

790K Japan's IT worker
shortfall by 2030

The 37-Year Wait

The Bubble That Took Three Decades to Forgive

Rewind to December 1989. Tokyo real estate was so absurdly priced that the land under the Imperial Palace was theoretically worth more than all of California. The Nikkei 225 hit roughly 38,900 and Japan looked unstoppable — the country that was going to own the future. That same year, 13 of the 20 largest companies on Earth by market cap were Japanese.

Then it all came apart — and the numbers are almost impossible to believe in hindsight. The Nikkei lost over 38% in 1990 alone, another 26% in 1992, and kept bleeding for two more decades. Its maximum drawdown from that 1989 peak hit 81.87%. If you'd put money in at the very top, you'd have needed to wait roughly 3,656 trading sessions — the better part of two decades — before recovery even began, and even then it wasn't a full recovery. At the end of 2019, thirty years after the peak, the index was still 40% below its all-time high.

The Scale of the Lost Decades

By the time the slump finally ended, zero Japanese companies remained in the world's top 20 by market cap — down from 13 in 1989. As late as 2021, the Nikkei was still sitting 26% below a peak it had set 32 years earlier.

Japanese households got burned so badly they stopped trusting equities altogether and parked their money in cash instead — for a generation. The recovery, when it finally started, was unglamorous. Around 2012, "Abenomics" kicked off a slow rebuild. Then came something more structural: starting in 2014–2015, Japan introduced corporate governance reforms, intensified since 2023 by the Tokyo Stock Exchange's push for capital efficiency, forcing companies to stop hoarding cash and start actually rewarding shareholders. Warren Buffett quietly built large stakes in Japanese trading houses, and the world started paying attention again.