According to John Koudounis, CEO of Mizuho Securities USA, there's more room to run. Prime Minster Shinzo Abe's economic policies - dubbed "Abenomics" by many in the investment world - continue to work, driving stock prices higher and the value of the yen lower.
In Koudounis' estimate, Abenomics is still in the early innings, despite the Nikkei climbing over 100% and the yen declining by more than 40%. Still, investors can't expect overnight successes.
Fiscal policies and corporate governances take time to implement and once implemented, take time to show the affect. "It's working," he insisted, but it will take time to continue proving it.
Helping drive the stock gains is the country's pension fund, the GPIF. It's the largest pension fund in the world, standing at $1.3 trillion. Koudounis says the administration recently increased its equity allocation from a modest 8% to a whopping 50%.
Because of the depreciation of the yen, Koudounis explained that the administration wants more exposure to equities, as stocks continue to climb. They have also increased their allocation to international equities as well.
Tourism in Japan is also on the rise. Koudounis, who goes to Japan roughly six times per year and once per quarter, says the hotels are packed, restaurant reservations are hard to come by, and construction continues.
The depreciated yen has made it cheaper for foreigners to travel within the country, which boosts revenues for many industries. The 2020 Olympics will also help drive tourism, he concluded.