As the Nikkei index rockets to heights last seen at the peak of Japan's post-war mirA acle economy, investors worldwide have reached a consensus: Japan is a 'buy.' According to analysts from Goldman Sachs and J.P. Morgan, record gains have been driven by the high upside in Japan's equity market, a position all but confirmed by the Tokyo Stock Exchange (TSE) itself - when it outlined plans this March to force companies trading below their book value to increase their stock prices. Another reason is Japan's accelerated adoption of global megatrends like digitalisation, decarbonisation, and automation - Japan has the third highest robot density in the world, according to the latest data compiled by the International Federation of Robotics (IFR).

But the return to form of Japanese stocks has been coming for a long time. Ever since Japan's 'Lost Decade' - a period of policy-resistant economic stagnation in the 1990s - successive governments have championed self-sustaining growth, macroeconomic stability, and an innovation-rich private sector. As a percentage of GDP, Japan spent the most of any G7 country on R&D in 2021, according to the World Intellectual Property Organisation (WIPO), and for the decade ending that year, was home to the third highest number of researchers, according to the National Institute of Science and Technology Policy (NISTEP).