The recent surge in Japan's Nikkei stock index has reached its highest point since 1989, a remarkable recovery from decades of economic stagnation. However, for many Japanese like Takashi Karube, this rally has brought little solace.
Karube, born just after the 1989 stock market peak, has witnessed firsthand the challenges of Japan's declining economic power. His salary has remained stagnant for a decade, and he has resorted to cutting back on expenses to cope with rising food costs. He has also invested in overseas stock funds, reflecting his pessimism about Japan's future.
Japan's economy has slipped into recession and is no longer the world's third-largest. The weak yen, while benefiting exporters like Toyota Motor, has driven up the cost of essential goods, exacerbating "bad" inflation.
Despite the stock market rally, there is still a deep-seated pessimism among Japanese investors. The trauma of the bubble's collapse and subsequent economic crisis continues to linger, with many wary of investing in the domestic market. As a result, many Japanese are investing their NISA tax-free stock accounts overseas.
Even as large companies announce record wage increases, smaller companies that employ the majority of the workforce struggle to raise wages. Workers face a bleak outlook, with rising expenses eroding their purchasing power.