Takaichi, AI, Corporate Reform Pave Way for Japan Stocks in 2026

Japan’s stocks are expected to extend gains in 2026, with Prime Minister Sanae Takaichi’s aggressive fiscal plans building on the momentum of the past year.

Tokyo’s benchmark Topix index has weathered tariff shocks, two Bank of Japan rate hikes and a change of prime minister to gain about 23% this year, putting it on track for its biggest outperformance versus the S&P 500 since 2022. The rally — which led Japan’s benchmarks to multiple record highs — has laid the foundations for further gains, strategists say.