Why Japanese Stocks Could Keep Rallying

Exchanges

Goldman Sachs

Business

4.3 • 1.1K Ratings

🗓️ 24 February 2026

⏱️ 18 minutes

🔗️ Recording | iTunes | RSS

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Summary

Goldman Sachs Research’s Bruce Kirk discusses the implications of Japan’s recent snap election and the implications for the equity market and foreign investors. Date of recording: February 19, 2026. The opinions and views expressed herein are as of the date of publication, subject to change without notice, and may not necessarily reflect the institutional views of Goldman Sachs or its affiliates. The material provided is intended for informational purposes only, and does not constitute investment advice, a recommendation from any Goldman Sachs entity to take any particular action, or an offer or solicitation to purchase or sell any securities or financial products. This material may contain forward-looking statements. Past performance is not indicative of future results. Neither Goldman Sachs nor any of its affiliates make any representations or warranties, express or implied, as to the accuracy or completeness of the statements or information contained herein and disclaim any liability whatsoever for reliance on such information for any purpose. Each name of a third-party organization mentioned is the property of the company to which it relates, is used here strictly for informational and identification purposes only and is not used to imply any ownership or license rights between any such company and Goldman Sachs. A transcript is provided for convenience and may differ from the original video or audio content. Goldman Sachs is not responsible for any errors in the transcript. This material should not be copied, distributed, published, or reproduced in whole or in part or disclosed by any recipient to any other person without the express written consent of Goldman Sachs. Disclosures applicable to research with respect to issuers, if any, mentioned herein are available through your Goldman Sachs representative or at http://www.gs.com/research/hedge.html Goldman Sachs does not endorse any candidate or any political party. © 2026 Goldman Sachs. All rights reserved. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	After a very strong 2025, Japanese stocks have built on those gains in 2026.
0:12.0	The most recent catalyst has been the outcome of the snap election.
0:15.0	Prime Minister Sunai Takichi's resounding victory could pay the way for pro-growth policies
0:20.0	and might shift global investor
0:22.0	perceptions about the Japanese market.
0:24.3	I'm Alison Nathan, and this is Goldman Sachs Exchanges.
0:31.0	Today I'm joined by Bruce Kirk, our chief Japan equity strategist in Goldman Sachs research.
0:35.8	He joins us remotely from Tokyo.
0:38.2	Bruce, welcome back to exchanges. Hi, Alison. Thanks for having me on the show. So let's just start with the recent
0:43.0	news, Bruce. The election, of course, is the news of the day. You actually raised your target on
0:48.7	Japanese equities on the back of Takayichi's victory. So how consequential really are these results?
0:55.3	Our view is that this election result is extremely consequential, both from a political
1:01.1	stability point of view within Japan and as a positive for the overall Japanese
1:06.2	equities market itself. Now, both of these factors, we think, are interlinked. And if you look at the
1:11.9	performance following previous election results, which have been politically significant, you do seem
1:18.6	to see that. So what we observe when we look at the three previous elections historically,
1:25.1	where an LDP-led coalition has achieved a two-third super
1:29.8	majority in the lower house, and that would be 2005, 2012 and 2014. What you tend to see is
1:38.0	there's an initial positive market reaction, and the market tends to go up about 20% on average
1:43.6	in the first three months after the
1:45.8	election itself. But then over that next nine month period, what we see is there's an expansion
1:52.5	of the topics multiple. And that peaks about three points higher from where we tend to be at
	...

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