Rapid rise in stock prices is “speeding” Bubble researchers predict long-term recession | AERA dot.

“The Japanese stock bubble is finally bursting.”

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Professor Satoshi Obata of Keio University Graduate School says this.

The Nikkei Stock Average, which started in the 33,000 yen range in 2024, has skyrocketed since the beginning of the year, reaching a new post-bubble high in late February on a closing price basis, and surpassing 40,000 yen in early March. As expected, since the start of the new fiscal year, the price has gone into adjustment, and the price has fallen to the 37,000 yen level due in part to the tense situation in the Middle East, but it is likely that the Nikkei average will continue to fall. It is.

“The sharp rise since the beginning of the year was clearly a speed violation, and it was a complete bubble. I don’t think the Nikkei average will recover to 40,000 yen in the future.”

Professor Obata is known as a “bubble researcher” and is the author of “All Economies Lead to Bubble”. He is also a stock market watcher and has long warned of stock price bubbles caused by excessive monetary easing.

“This time, the surge in overseas stock prices spread first, led by the United States, and Japanese stocks were the last to rise.The structure is the same, and both the world and Japan are bubbles, so it is possible that stock price bubbles around the world will burst at the same time. There’s also the gender thing.”

Three bubbles after the Lehman Shock

According to Professor Obata, it all started with the global financial crisis caused by the Lehman Shock in September 2008. The bubble at the time burst due to the Lehman Shock, but central banks around the world poured money into the market to ease the pain, so the bubble never completely burst.

“It’s the so-called quantitative easing policy, but blind monetary easing has created another bubble. This is the ‘quantitative easing bubble.'”

The coronavirus pandemic will begin in 2020 with the spark remaining. As economic activity stopped and stock prices plummeted, the world began implementing fiscal policies and spending a lot of money. Professor Obata calls this a “corona bubble.”

“In the end, we ended up creating a bubble three times, including Lehman. I call the ‘Quantitative Easing Bubble’ and the ‘Corona Bubble’ the ‘Encore Bubble,’ and there were three bubbles. Repeating it will be enough.”