Analysis: Japanese investors are leaving the reflation trade to foreigners
Published on: Monday 01 September 2025
SINGAPORE (Reuters) -Japanese financial markets are undergoing a long-awaited reflation trade. "Global investors have been a major driver of the rise in Japanese stocks," said Nicholas Smith, a strategist at CLSA in Tokyo. As supportive government policies and corporate reforms help Japan to ignite economic growth after almost three decades of lacklustre activity, the Bank of Japan raised interest rates this year for the first time since before the 2008 global financial crisis and has sold down its vast holdings of government bonds.
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