On Monday morning Japan's Nikkei 225, which is a price-weighted index and includes 250 companies on the Tokyo Stock Exchange (TSE), topped 30,000 for the first time in three decades.
The index has spiked 84% since the March lows. The ride up has been fueled by the Bank of Japan's Quantitative Easing and negative yields, which has incentivized investors to tilt their portfolio towards equities.
On the other hand, the Japanese economy experienced its first contraction since 2009, shrinking by 4.8% in 2020, while government gross debt to GDP has surpassed the incredible number of 260%.
Moreover, the Buffet Indicator (Market Capitalization/GDP) suggests that the Japanese stock market is significantly overvalued, as the market cap is almost twice the GDP of the country.