TOKYO, July 4, 2019—At about $30 trillion, the New York Stock Exchange stands out as the world’s largest securities exchange now. Add Nadaq’s $16 trillion, the United States far outdistances all other major exchanges combined including Shanghai ($5.9 trillion), Hong Kong ($5.7 trillion), Tokyo ($5.2 trillion), and Dax ($3.3 trillion).
Tokyo, which had been ranking third after New York and Shanghai the past decade, slipped to fourth after Hong Kong in the 2019 spring and now is even with the former British colony. Whether Tokyo can recapture the third place may be conditioned to where global trade will develop against the backdrop of U.S.-China trade tensions.
Retracing history to the 1980s: The United States was of course at the very top place, but Japan surged to a close second in the late 1980s, and though it was a blip in the chart, Japan outranked the United States and became the global top, only to surrender that ranking in a matter of months later – in February of 1991 when the Japanese bubble burst with the Nikkei stock average going into a near free fall. When Tokyo dethroned Wall Street in market cap with an all-time high Nikkei average of 38,957 on Dec. 29, 1989, Japan growled itself as a country of indomitable samurai gobbling up prime American and foreign properties and that the world had entered an era of ‘pax-japonica.”
Japan’s nominal GDP in 1990 was 457 trillion yen (approximately $4.3 trillion at current exchange rate), while the U.S. GDP the same year was $5.9 trillion – so Japan was not all that far behind when factors such as population, manufacturing capacity and others are considered. In 2018, Japan’s GDP was $4.9 trillion, virtually stalling throughout those years, while the U.S. GDP ramped up to a whopping $20.5 trillion. Unsurprisingly, the U.S. per capita GDP, at $62,641 in 2018, far out-distanced Japan, which was a mere $39,200 the same year.
While not directly related to economic performance data, the U.S. population, at 327 million, has been growing steadily, up 0.6 percent in 2018. Japan’s population turned to negative growth in the early 2010, and is projected to contract to less than 100 million by 2050 from 127 million in 2018.
Hard data speaks truth and foretells while lawmaker and bureaucrat comments sound hollow.
Toshio Aritake