Group 1 - A surge in retail investors in Japan has been observed, with the number of individual shareholders increasing by 12.3% to reach 83.6 million, marking a historical high since 1949 [1][3] - The Japanese small investment tax exemption system (NISA) has significantly contributed to this trend, with cumulative purchases under NISA growing by 50% year-on-year to approximately 52 trillion yen by the end of 2024 [3] - Despite the increase in retail investors, the overall performance of the Japanese stock market has been disappointing, with the Nikkei index declining by 4% in the 2024 fiscal year, the worst performance since 2019 [3] Group 2 - Warren Buffett's announcement of Berkshire Hathaway's significant investment in Japan's five major trading companies has spurred retail investors to follow suit, leading to increased investments in these stocks [4] - The sentiment among Japanese retail investors reflects a "follow the leader" mentality, with many believing in Buffett's value investment philosophy [4] - Analysts suggest that even a small return of retail investor funds to the stock market could result in a substantial influx of capital, potentially up to $220 billion [4]

Core Viewpoint - Japan is experiencing a surge in retail investors, with the number of individual shareholders reaching a historic high, driven by favorable market conditions and investment incentives like the NISA program [2][3][4]. Group 1: Retail Investor Growth - The number of individual shareholders in Japan increased by over 12% in the fiscal year 2024, reaching approximately 83.6 million, marking the largest increase since records began in 1949 [3][4]. - The total market value of stocks held by retail investors decreased by 4% year-on-year, amounting to 164 trillion yen (approximately 1.14 trillion USD) [4]. Group 2: Impact of NISA and Market Conditions - The NISA program has seen a 50% year-on-year increase in cumulative purchases, totaling around 52 trillion yen by the end of December 2024, indicating a shift of funds from savings to investments [2][4]. - Stock splits by major companies like Mitsubishi Heavy Industries and Hitachi contributed to the addition of 2.7 million new shareholders by lowering the entry price for retail investors [4]. Group 3: Influence of Warren Buffett - The investment strategies of Warren Buffett, particularly his significant stake in Japan's five major trading companies, have inspired many retail investors to follow suit [5][6]. - Retail investors perceive their value investment approach as aligned with Buffett's, leading to increased interest in trading company stocks [7]. Group 4: Market Dynamics and Future Outlook - Analysts suggest that the growing participation of retail investors could lead to a more stable shareholder base for trading companies, benefiting from long-term holdings [8]. - Even a small shift of 1% of cash into the stock market by retail investors could result in an influx of approximately 220 billion USD into the Japanese stock market [8].

Core Viewpoint - The number of individual shareholders in Japan has surged by 12% to a record high of 83.6 million in the latest fiscal year, reflecting a deepening investment culture in Japanese society [1][2][3] Group 1: Individual Shareholder Growth - The total number of individual shareholders reached 83,594,852, an increase of 9,141,264 from the previous year, marking the largest increase since records began in 1949 [1][2] - The increase in individual shareholders is attributed to the expansion of the NISA (Nippon Individual Savings Account) program and favorable stock prices for retail investors [2][3] Group 2: Investment Trends and Market Performance - The cumulative purchase amount under NISA increased by 50% year-on-year, reaching approximately 52 trillion yen by the end of December 2024 [3] - Companies that underwent stock splits, such as Mitsubishi Heavy Industries and Hitachi, saw an increase of 2.7 million individual shareholders due to lower post-split stock prices [3] - The Nikkei 225 and TOPIX indices reached historical highs last year, driven by improved corporate earnings and governance reforms, although they faced significant declines later due to uncertainties in the U.S. economy [3][4] Group 3: Market Capitalization and Foreign Investment - The market value of stocks held by individual investors decreased by 4% to 164 trillion yen (approximately 1.14 trillion USD), representing 17.3% of the total market [4] - Foreign investors' shareholding ratio rose to 32.4%, marking a record high for the second consecutive year [4] - The proportion of shares held by companies fell to a historic low of 18.7%, indicating a continued trend of divesting cross-shareholdings driven by corporate governance reforms [4]