Japanese Stocks Are Fast Recovering the Ground Lost to China

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Persistent buying by Chinese investors helped propel Japan’s Nikkei 225 and Topix indexes to their highest levels in 34 years this week. Photo: Bloomberg

(Bloomberg) — Japan stocks are rapidly recovering the ground they lost to their Chinese peers in the early years of the pandemic as global investors continue to seek alternatives to the world’s second-biggest economy.

The gap between the market capitalization of Chinese mainland and Japan has shrunk to $2.7 trillion, the smallest since July 2020, data compiled by Bloomberg show. The last time Japan commanded a higher value than China was in early 2019.