Economic Growth and Stock Market Performance - After World War II, Japan's economy began to recover in the early 1950s, achieving an average annual growth rate of 9.2% from 1953 to 1970, surpassing some developed countries [1] - Post-1970, Japan's economic growth rate declined as the advantages of being a latecomer diminished, with a significant drop in growth following the oil crisis and inflationary pressures [1] - From 1971 to 1990, Japan's economic growth rate stabilized around 4%, and further declined to approximately 1% after the real estate bubble burst in the early 1990s [1] Stock Market Returns - From 1953 to 2018, Japan's stock market yielded an average return of 5.5%, exceeding the economic growth rate of 4.3%, attributed to corporate leverage and the capital's advantageous position in income distribution [2] - Despite a downward trend in economic growth starting in the 1970s, stock market returns increased, with a notable rebound from -0.2% in 1983 to 17.2% in 1989 [2] - The rise in corporate profits during the transition phase was driven by industry restructuring and increased concentration in high-end manufacturing sectors such as precision instruments, automotive, and electrical machinery [2] Impact of Economic Conditions on Stock Returns - Following the real estate bubble burst in the early 1990s, Japan's stock market returns fell to 1.3% by 2018, although still above the 1% economic growth rate [3] - The Bank of Japan's stock purchases and subsequent quantitative easing measures supported stock market returns post-2002 [3] - Between 1971 and 1990, there was a positive correlation between government bond yields and stock returns, influenced by capital control relaxation and declining savings rates, while post-1991, the relationship reversed due to declining economic growth and worsening corporate profits [3]