How can the Topix break through 1,800?

Hideto Yamamoto, chief executive officer & chief investment officer at DIAM International, explores what Japan needs to do if the Topix is to pass 1,800 for the first time since 2007

Last year, the Japanese equity market started to outperform the rest of the world, triggered mainly by the additional aggressive monetary easing by the Bank of Japan and the announcement of a change in asset allocation of the Government Pension Investment Fund (GPIF). However, according to revised gross domestic product figures, it appeared the economy had actually contracted by 1.9% in annual terms from July to September, above a preliminary reading of 1.6%. Despite this, December's election guaranteed incumbent Prime Minister Shinzo Abe another four years in office. At the same time...