The shadow of the Olympics has hung over Japan’s range-bound stock market for months, with some fearing COVID-19 disaster while others hoping that medal wins would help the country mentally move past the pandemic.
With less than a week of the games to go, chances are looking good the Olympics themselves will be considered an achievement. COVID-related disruptions have been minimal, while Japan’s athletes have already taken home a record haul of gold medals.
However, the market outlook is mixed, with analysts divided over whether Japanese equities — which usually get a boost from a rich medal haul — will rally in the months ahead as vaccinations proceed apace. The alternative is that a growing wave of COVID-19 cases and public disillusionment over the handling of the pandemic lead to political instability, worsening the underperformance of Japan’s stock benchmarks.