Why ‘everything aligns’ for Japanese stocks

Driven by corporate governance reforms and a return of foreign investors, Japan's TOPIX has surged to levels not seen since 1990 as the economy transitions from deflationary stagnation to wage growth and inflation. Goldman Sachs forecasts the index to reach $2,400 by year-end and $2,500 within twelve months, recommending a barbell strategy targeting undervalued machinery and banking sectors. This outlook persists despite risks from potential US and Chinese revenue slowdowns and anticipated central bank policy adjustments.