Why Japan’s Stock Market Can Keep Rising

Japan was a global bright spot in 2025. Despite much hand-wringing over its debt burden, it is likely to remain so in 2026. 

The county is firmly in a reflation phase with growth, wages and prices all in an upcycle. The Bank of Japan has responded by raising interest rates to their highest level in three decades, prompting some concern among commentators and investors. But this should be seen as a strong vote of confidence in the Japanese economy, which has proven resilient to tariffs and global shocks.