The Nikkei Average is said to have exceeded ¥70,000 in June and has risen to its current level. At the same time, as foreign investors gain greater influence, factors that could trigger a stock market crash are being debated.
The article states that the Nikkei Stock Average exceeded ¥70,000 in June 2026, surpassing its bubble-era high. It describes how the index previously reached the ¥40,000 range in March 2024 and passed the ¥50,000 mark in October 2025, suggesting that factors beyond the growth of domestic companies have supported stock prices.
External factors supporting the market include Japan’s position as a destination for investment money reallocated from China, a flight of funds from U.S. stocks, and historic yen depreciation. The interaction of these factors is said to have strengthened foreign investors’ purchases of Japanese stocks.
The article presents the view that if any of the factors described above were to break down, turmoil in the stock market could be unavoidable.
Against the backdrop of rising foreign ownership, some investors with greater influence are said to be making demands of listed companies, including more efficient use of shareholders’ equity and improved ROE, while calling for stronger shareholder returns such as dividend increases and share buybacks.
This article is an edited and reworked excerpt from Richard Kay’s book, “Foreigners Buying Japanese Stocks, Japanese Buying Foreign Stocks.”