Japan's Nikkei surpasses 1989 all-time high (opens in new tab)

The other side of this coin is that exports are very difficult. My dad is a nut farmer and the business is completely unsustainable right now. Expenses are through the roof while simultaneously crop prices are at all time lows due to the collapse of exports. It's nuts.

We Canadians used to regularly talk about how cheap the US was, and load up on gas, food, beer, cheese and all the rest when staying in cheap hotels and getting cheap meals with cheap entertainment (concerts, sporting events, etc.). If you could be bothered electronics were cheap, cars were cheap, clothes were cheap, etc. etc.

In the last ~12 months I have been floored how expensive life in the US is now. I was just down two weeks ago, and everything was either the same dollar number as Canada or higher, but it's in US dollars.

I don't know how people are doing it.

Overvalued by a lot, we expected a full global crash in which so far in history the USA has bounced back first. But instead we pumped out 20% of all USD ever printed, which created a slow burn. As long as the keep rates where they are or higher, we should recover. I personally think rates are too low, and this last week has proven that is the right view, the market can still remain delusional far longer than I can. The longer the unrealistic expectation of rates falling at all this year, just increases the risk we'll have trouble. Cheap cash is gone, you gotta earn it now. Downvote all you like, doesn't change the fact that rates need to stay up or we risk a similar situation as the early 80's.

America has always been famous for the fact that everything is extremely cheap. But now I'm seeing videos of people at Costco/Walmart showing the prices of stuff (often while finding an old price label and showing there's been a 50-100% increase over the last year) and it's actually way more expensive than what I pay in the UK.

It’s idiotic. I went to Zermatt and the little grocery store there was cheaper than Seattle Safeway. A ski resort in a land locked country with higher food quality standards that has cheaper food than a coastal US city with a port is absurd. I think safeway is trying to take over QFC/Kroger so that’s great.

the dollar is hitting record inflation rates though. does that mean the worst is yet to come for the dollar?

It's not like folks here regularly shop in USD. Sure, summer vacations in Hawaii have become more expensive, but...

Import-dependent companies - different story. Export-oriented companies: Yeehaw.

It hasn't lost half its value. A "weak yen" simply means the yen depreciated relative to another currency.

USD to JPY 1y chart does not show a 50% decline - more like 11%

My graph says it's about the same against USD.

Food, in general, has always been cheap in Japan.

> It’s too bad China is still hard to get to by plane (Russian airspace being closed really hurts).

Assuming you're flying from eastern US, taking the pacific route to bypass RU airspace instead of the polar route doesn't add that much distance to get to coastal China.

And Chinese airlines can still overfly RU.

We flew ZipAir which has amazing prices on lay-flat seats, around $2,000 round trip. Also significant discounts for kids: tickets for my 2 year old and 5 year old were just a few hundred dollars round trip.

Checking prices on google flights, assuming a trip in April from SFO where I live, cheapest option is about $800 round trip to Tokyo, or $1050 to Shenzhen. A bit cheaper but maybe not a significant difference for such a long distance trip.

So sad "We can't afford Uniqlo" is a meme in Japan...

Idk but maybe Uniqlo is uniquely cheap in Japan as Japanese chain? I've bought Uniqlo in Poland, UK, USA and Korea and prices stayed relatively consistent.

Restaurant food is cheap in Japan because there are many high-quality restaurants. The competition drives the price down. Furthermore it may be in the best interest of Japan for their monetary policy to weaken the yen because it induces demand in tourism.

Sushi is waaaaay cheaper in Japan. Always has been, now more so.

It's the island country with fishing being well developed part of the economy, so of course fish-based food is dirt cheap.

"There Is No Alternative"? I had to consult ChatGPT to get that acronym explained.

I was highly suspicious of the implication that the Japanese government would do anything other than making sure nothing changes

I'm Japanese.

Not to be judgemental, I doubt you usually hear a lot from Japanese person in the first place; most Japanese don't speak English at all. Locals speaking to a BBC reporter in fluent English don't happen in Japan or with Japanese users on Internet.

Japanese public education curricula do include "English", but it's largely "English-Japanese document translations" classes than actual English, which is good for research papers and bureaucratic letters, works like any 2000s machine translation in conversations. The majority won't bring that technique out and employ it well to win an Internet pub fight, especially on societal-macro-economical problems, so you likely will not hear anything from actual Japanese people on this topic or anything else.

It's a double-edged sword though. A weaker yen can increase export sales, however import value will be much higher. Currently, most products in Japan are made from Japanese companies, which is why the Japanese people don't feel the impact yet.

My wage in terms of dollars have remained the same for the last 5 years despite earning double. It's not ruining my life only because it takes longer for prices to increase here -- but they are definitely increasing.

Japanese people also don't like talking about wages and not everyone compares what they are making to the dollar. I have heard plenty of colleagues, friends, and family complain. It's more about how the number of diapers in a bag has decreased steadily from 72 to 56 than boy my life is getting ruined by weak yen.

The more prevalent complaints are from fellow mortgage borrowers. Variable rates in Japan have been steady for nearly 30 years, meaning a substantial number of borrowers are watching the central bank's moves like a hawk and are terrified of even any talks of rate increases.

TLDR: We are just not loud complainers (and frankly, if any Japanese person you know is hopefully very lucky, they might be earning just enough to not notice it all)

Looks like the Nikkei 225 average dividend yield is around 1.4%. If you bought in 1989 and reinvested dividends it looks like you would have briefly broken even in 2015 (ignoring inflation), then hit solid black sometime in 2017. This is completely absurd and shows how huge of a factor timing is in market investments.

Remember, kids, dollar cost averaging is usually the way to go.

While academically you are correct, I am not sure I would say it has never been a good idea. I have a US bias but most portfolios in the US have a significant if not total weighting on domestic markets. Even in my memory of the last 10 years there have been continuous questions on how much international exposure one should have. Most of the time you see something like a 5-10% exposure in international markets which in theory gives you the "best risk adjusted returns" but in reality since the US has been a continuous powerhouse, gives you a lower overall return.

Many people, especially in Japan don't realize not investing and simply saving means they're actually investing in their own country long term, which for Japan, doesn't look like a smart strategy at this point.

The boglehead philosophy involves slow accumulation of an index portfolio over time. Not many people had a huge windfall in 1989 and put it all in the Nikkei at once. The money you invested in 1980 is up 500% before dividends.

You are not entirely wrong. The thing is though, the US has been an economic powerhouse on the global stage for decades. The US health impacts much of the rest of the world's markets.

While that is true, there's also no guarantee that we do not see a stagnation of the world stock markets for decades. World indices are also highly concentrated to a few countries, e.g. US is more than 60%.

> Germany is doing just fine

Perhaps do a little research than believe whatever you want to believe?

Just searching for "german economy" would yield the world is saying the opposite.

Did you read the article? Or even just the headline?

If push came to shove, the FED's last resort could be to buy stock ETFs

Bro that happened in covid

The relevance is that this is not remotely an all-time high when denominated in gold (and, presumably, an implicit claim that a valuation in gold is in somehow more "real" than a valuation in nominal yen)

Forgetting dividends here.

Well it also paid dividends the entire time too which doesn’t get factored into the price. So maybe it matched up with inflation. I don’t know either way. You’d have to compare the total return with the total inflation.

Inflation was about 0.5% and dividend yield around 1% so it's still up

>> Adjust for inflation and include the risk free rate of return

You should choose one of those two, not both.

It depends on the % of investors that are in those broad indexes. If too many people flock into them, they become more risky than an average stock. And stocks in indexes become overvalued compared to stocks not in indexes.

If you’ve got a stock picking strategy that promises a real return, I’m all ears. As far as I know, the market makes no promises period.

That's not the only issue with this reasoning, this index is not a total returns one. And if you had been investing regularly you'd have bought companies at the Lowe price, which has produced a 2-3 times return in the last ten years.

Still, I also prefer global indexes.

I think the point is that "indexes are overall superior to stock picking, and always go up over long periods of time" is disproved by the history of Nikkei.

Sure, at a given time and place, an index may be better. At other times one or two stocks may be better. But I think the "time in the market beats timing the market, always" is kind of negated by Japan's lost decades.

Which is completely countered by purchasing ETFs.