For Japan, 2023 was not perfect by any means. But it was as good a year as Asia’s second-largest economy has enjoyed in a long time.
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The IMF tips the economy to have grown 2% last year, the highest figure since 2010. After years of deflation or very low inflation, price growth is back on the agenda. Inflation averaged 3.4% over the 12 months to the end of November 2023.
More shockingly, thanks to rising corporate earnings and a cheap currency less vulnerable to foreign-exchange oscillations, share prices are once again heading in the right direction.
On January 15, the Topix index, a broad measure of Japanese stocks, broke through the 2,500-mark for the first time. The same day, the Nikkei 225 stock average, busy notching a series of record highs, flirted with the 36,000-mark, a further sign of the premium global investors currently place on local equities.
Policymakers still face plenty of challenges ahead. After a strong start to 2023, growth contracted 2.9%