Painful reform and strong economy feed rising market

In 2005, Japan was the best performing stock market of the major economies, rising by 43.5% and finishing at its highest level since September 2000 in December last year. Although returns may not be as high as last year, Japanese equities are expected to deliver better returns than most markets again in 2006. There are a number of reasons why Japanese equities should continue to rise, mainly due to an improving domestic economy and a government eager to reform. In the face of opposition, prime minister Junichiro Koizumi has attempted to implement significant reform over the past few yea...