Goldman Sachs identifies key catalyst for Japan’s equity market

Japanese stocks have been on a tear in recent weeks, fuelled by a historic landslide election victory for Prime Minister Sanae Takaichi and a robust corporate earnings season. The benchmark Nikkei 225 index has rallied over 4.0% recently to “record highs” as domestic and foreign investor alike cheered the political stability and Takaichi’s “Sanaenomics” agenda of fiscal expansion. Despite this rally, however, Goldman Sachs remains decidedly “overweight” on Japanese stocks – arguing they’re not out of juice just yet. The investment bank points to structural improvements in corporate governance and massive share buybacks as the real engines of growth, keeping Japan at the top of its “global conviction list” for 2026. What may drive Japanese stocks higher in the near-term…