Tokyo's shares ended the year on a high note, climbing more than nine percent in 2015 to rank among the world's top-performing major markets. The benchmark Nikkei 225 rose 9.07 percent while the Topix index of all first-section shares tacked on 9.93 percent since January - ahead of most major markets in the US and Asia-Pacific. The positive finish marked the fourth year of gains for the Japanese market, although the Nikkei is sitting below its June highs.
It was near the 21,000 level before China's shock currency devaluation this summer hammered equity markets as it aggravated worries about the powerhouse economy - a major driver of global growth and a key market for Japanese firms. On Wednesday, Japan's last trading session of the year, the Nikkei ticked up 0.27 percent, or 51.48 points, to close at 19,033.71.
The Topix rose 0.25 percent, or 3.91 points, to 1,547.30. Analysts were generally upbeat on the prospects for Japanese equities in 2016, saying shares are still relatively cheap. Also positive, the yen would remain weak on expectations of more monetary easing by the Bank of Japan, as it looks to counter sluggish growth in the world's number three economy, they said. A weak yen boosts the profitability of major exporters and lifts investor demand for their shares. The past year saw Japan unveil a long-awaited corporate governance code in a bid to improve firms' transparency, and attract more overseas investors.
The national pension fund - the world's biggest - also helped boost the market in 2015 as it ploughed more of its bond-heavy portfolio into domestic and international stocks. The cloudy picture for China's economy will be crucial to for Japanese shares in 2016, analysts said. "It isn't that China's economy is in such a bad state, but that it's difficult to know what really is going on," said Chihiro Ohta, general manager of investment information at SMBC Nikko Securities.
Julian Jessop, at research house Capital Economics said Japan's prospects were bright. "A combination of fading fears over China and additional yen weakness as the Bank of Japan steps up the pace of its asset purchases should allow Japanese equities to outperform their US peers in 2016," he said in a commentary. The BoJ's 80 trillion yen ($665 billion) stimulus scheme - a cornerstone of Prime Minister Shinzo Abe's attempt to spur growth, dubbed Abenomics - sent the yen into freefall. On Wednesday the dollar fetched 120.41 yen, making the yen worth about 40 percent less than when Abe came to power three years ago.
Among the big gainers in 2015 was Japan Post, which raised $11.5 billion in a hotly anticipated initial public offering aimed at privatising the huge company. The triple-listing - which included the firm's banking and insurance units - saw the holding company's stock soar about 33 percent from its IPO price. But the insurance division led the pack with nearly a 42 percent gain since the listing. Nintendo climbed almost 33 percent this year as it presses on with a plan to revive its fortunes with a push into the lucrative smartphone gaming market.
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