Japan’s economy clocked another quarter of double-digit-rate growth and finished the pandemic year in better shape than initially expected, signaling potential for a more sure-footed recovery once the state of emergency ends.

Gross domestic product grew an annualized 12.7% in October through December, the Cabinet Office reported Monday. The result was better than most economists had forecast and defied a winter surge of the coronavirus.

The Nikkei stock average responded to the news by topping 30,000 for the first time in over 30 years in Tokyo. With major Japanese firms upgrading their earnings outlooks for the year through March, some analysts forecast the 225-issue Nikkei could rise as high as 34,000 by the end of the year.

Japan's market has 'a lot of potential' that's unappreciated, says CLSA | CNBC INTERNATIONAL TV
Japan’s market has ‘a lot of potential’ that’s unappreciated, says CLSA | CNBC INTERNATIONAL TV

Companies serving the stay-home masses are thriving. The three top mobile phone carriers saw profits increase year on year in the last quarter. Shipments of laptops in Japan surged 25.1% in 2020, aided by teleworking and the government’s policy of supplying computers to individual students.

On the other hand, brick-and-mortar customer-facing businesses are feeling the pain. Regional banks are being urged to merge to survive, with the Bank of Japan even offering extra interest on their savings if they do so.

And Main St. is suffering. In the central hub of Nagoya, for example, downtown is now dotted with empty stores and offices due to the telework boom and an almost 100% drop in tourism, the Chunichi Shimbun reports.