The Nikkei index closed at an all-time high Thursday, breaking the previous record set in 1989. What does that mean for Japan's economy?

I wish I could say that firms will be under greater pressure to raise wages, but that's not how things work in Japan. Household financial assets are up, possibly prompting more consumer confidence.

What does that mean for Japan's economy?

Nothing,

Average Taro still struggling to buy items after price increase.

https://www.japantimes.co.jp/news/2023/07/22/business/japan-price-hikes-2023/

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Families with babies struggling because price hikes.

https://english.kyodonews.net/news/2023/08/a5ab91062795-families-with-babies-in-japan-facing-steeper-price-hikes.html

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Japan Inc still using cheap Vietnamese worker to make more profit.

https://www.japantimes.co.jp/news/2022/11/16/national/vietnamese-trainees-overtime-pay

Simply that the top 225 companies are worth the same as on 29th December, 1989.

The yen Pre covid was 95 yen ( 08/2019 ) per USD. Now it is 66 yen per USD. Some might argue That a strong USD. In the few next weeks the AUD will reach parity with the yen. Today it is 98 cents to 100 yen. Pre covid 72 cents to 100 yen. ( 08/2019 ) Pre covid the AUD was 71 cents to a USD. Today, it the same as the yen, 66 cent or 66 yen for 1 USD. The AUD has gone down 5 points where the Yen has gone down 32 points during the same time line against the value of the 1 USD. That like 30% and that a decline on anyones books.

Should start trickling down any day now, right? Right?

Now it is 66 yen per USD

A dollar currently buys about 150 yen.

The Japanese stock market has finally reached the point where it was twenty-five years ago whereas the Dow is now fifty percent higher. It does not seem much to celebrate.

A dollar currently buys about 150 yen.

About the same as when the Nikkei hit its previous record at the end of 1989. But I suspect that's just coincidence.

This is just further proof that there is not one economy. It's better to consider at least three distinct economies: The wealthy are doing fine, the middle classes are feeling the squeeze due to interest rate hikes, whilst the proles are being hammered and pushed into poverty and debt by inflation.

The strength of the economy of the wealthy is used to cover up the economic damage impacting on everyone else. Hence the amusing stat of almost-but-never-quite-2% inflation, when some retail food prices double.

So when an article simply talks about 'the economy' or one aspect of it, particularly the casino that is the stock market, distrust it. The stock market is entirely divorced from the economies of the middle classes and the poor.

The Nikkei index closed at an all-time high Thursday, breaking the previous record set in 1989. What does that mean for Japan's economy?

Stock buybacks baby!

https://jp.reuters.com/article/japan-stocks-buybacks/cash-hoarding-japanese-firms-please-investors-as-share-buybacks-hit-record-idUKL3N20941K/

45,000 Nikkei soon, investor confidence is through the roof, and Japan Inc. record corporate profits make them bullish about the future.

All things tangible to the citizenry of Japan in a labor market right?

Neo-feudalism is here.

As a matter of course, the high stock market is not due to the fact that the Japanese economy is doing very well. While the weak yen has boosted exports, the growth in corporate profits is also largely due to the increased profits of overseas subsidiaries. In addition, the stock market is at an all-time high for a number of reasons other than corporate profits, including the buying Japanese stocks by leaving China, countering inflation, requests for reform by the TSE, the development of shareholder-friendly management, and the introduction of NISA.

However, high stock prices are positive for the Japanese economy. Consumption due to the income effect will offset, even slightly, the decline in consumption due to inflation. In addition, the GPIF's huge investment gains will have a large impact on pension finances. There may have been rumors that pension contributions had to be paid until age 65 or that pension benefits would start at age 67, but I don't think we have heard anything about this recently. If the pension system remains as it is now, there will be a positive impact not only for the rich but also for the poor.

David Brent: You travel to the USA you exchange 10,000 yen note into USD and you will get $66 USD today. Back pre covid 08/2019 and exchange that 10,000 yen note you would get $98 USD. that is a decline of 30 % on the value of the yen to the USD. During the same time I take a Aussie $100 note change that for USD I will get $66 today. Back pre covid 08/2019 that Aussie $100 note would get me $71 USD. Today that Aussie $100 note will get me 10,000 yen. Back in Pre covid that Aussie $100 note would have got me 7200 yen. See the difference the Yen has loss to both the USD 30% and the AUD 28 %. During that time the AUD has lost 5% to the USD.

We know both consumer spending and wages on an inflation adjusted basis have been down for about two straight years in Japan, meaning real economy's terrible, much like US and Europe, only they have higher interest rates and inflation making it likely even worse there.

It seems Govt. desperate to 'inject' confidence into markets, via various fiscal and monetary policies, because real economy is so bad. Ditto US and Europe!

Anyone believe sustained record Govt. deficit spending at a time of low unemployment is natural or healthy?

Keep in mind, all Japanese listed firms combined, have the approx. same value as Apple and Microsoft. That's not very impressive, plus they depend upon massive BOJ ETF purchases, so value's not even market based!

Japan's GDP per capita now BY FAR lowest in G-7, seems not a lot of new spending on the horizon with aging and depopulation!

You travel to the USA you exchange 10,000 yen note into USD and you will get $66 USD today.

Now it is 66 yen per USD.

One of these sentences you wrote is wrong. I'll let you decide which one that is.