The global financial landscape is shifting as equities gain ground against banks and government debt. In Forum, The Edge Malaysia Weekly (October 19, 2026 – October 25, 2026), Tan Sri Andrew Sheng traces how four economies built very different financial systems. The column names no Bursa Malaysia-listed company, so the figures below are global benchmarks for reading the trend.
How Big Has Japan’s Stock Market Become in 2026?
Japan’s stock market capitalisation stood at roughly ¥150 trillion in 1984. It peaked at ¥580 trillion to ¥630 trillion in 1989, around 40% to 45% of total global equity value.
Valuations then stayed trapped between ¥250 trillion and ¥400 trillion for over two decades. Corporate governance reforms, post-2013 monetary easing (“Abenomics”) and post-pandemic inflows pushed it to ¥1,400 trillion (RM36.19 trillion) in 2026, past the former peak.
Why Is Japan’s Government Debt Still Near 241% of GDP?
Gross general government debt rose from ¥130 trillion (about 40% of GDP) in 1984 to roughly ¥1,360 trillion by 2026. That is approximately 241% of nominal GDP.
Banking system assets climbed from ¥420 trillion to over ¥1,830 trillion. Post-2013 growth was driven heavily by Bank of Japan quantitative easing, including large purchases of JGBs and ETFs to keep yields near zero.
How Large Is China’s Stock Market After the 1990-1991 Launch?
The Shanghai and Shenzhen exchanges launched in 1990-1991. Capitalisation grew to approximately RMB105 trillion to RMB111.5 trillion (RM68 trillion) by 2026.
Banking sector assets rose from under RMB1 trillion in 1984 to RMB498 trillion-RMB520 trillion by mid-2026. Official central government debt plus estimated local government financing vehicle (LGFV) obligations reached about RMB300 trillion.
Which Market Has the Lowest Indirect-to-Direct Financing Ratio?
US equity capitalisation was roughly US$1.8 trillion in 1984. By 2026, it had surged past US$74 trillion-US$78 trillion (RM301.96 trillion-RM318.29 trillion).
Federal debt climbed from US$1.7 trillion to over US$40 trillion, while commercial banking assets grew from US$2.4 trillion to US$26 trillion. The crude ratio of indirect financing (banking assets plus bond market capitalisation) to direct equity financing shows the gap:
- US: 1.0 to 3.0, the lowest, so equities rival or exceed banks and bonds combined
- Japan: 3.0 to 9.0
- Eurozone: 6.0 to 13.0, the highest
- China: historically extreme, compressing as its stock markets mature
How Do Market-Centric and Bank-Reliant Systems Differ?
Market-centric systems like the US reward rapid innovation but can amplify volatility. Bank-reliant systems such as Japan and the Eurozone offer stability yet may allocate capital too slowly to emerging industries.
Stock markets support risk-taking, while banking systems are structurally risk-averse. Tech platforms are already encroaching on traditional banking franchises through speed, scale and richer data ecosystems.
Why Does the Yen Carry Trade Unwind Matter for Global Bond Yields?
As Japan raises interest rates to combat domestic inflation, the yen carry trade is unwinding. Japanese capital is flowing home and could lift global bond yields.
Large-scale AI infrastructure investment is increasingly debt-financed, exposing weaker borrowers to higher rates. In Japan, repatriated capital is shifting toward equities, with strategic pivots toward semiconductors and defence.
Key Takeaways
- Japan’s stock market reached ¥1,400 trillion (RM36.19 trillion) in 2026, past its 1989 peak.
- Japan’s government debt is roughly 241% of nominal GDP, while banking assets exceed ¥1,830 trillion.
- The US has the lowest indirect-to-direct financing ratio at 1.0 to 3.0, against 6.0 to 13.0 for the Eurozone.
- China’s equity capitalisation reached about RM68 trillion, but its banking assets remain far larger.
Disclaimer: This article is for general information only and is not financial advice. Figures are taken from the Forum column cited above. Do your own research before making any investment decision.
Frequently Asked Questions
What is the Plaza Accord and why does it matter?
In September 1985, Japan agreed under the Plaza Accord to allow substantial yen appreciation. The decision unlocked domestic liquidity, fuelled the late-1980s asset bubble and accelerated the relocation of manufacturing to Asean and later China.
How big is Japan’s stock market in ringgit in 2026?
Japan’s stock market reached ¥1,400 trillion, or RM36.19 trillion, in 2026. That is past its 1989 peak of ¥580 trillion to ¥630 trillion.
What is the indirect-to-direct financing ratio?
It compares banking assets plus bond market capitalisation with direct equity financing. The US ranges from 1.0 to 3.0, Japan from 3.0 to 9.0 and the Eurozone from 6.0 to 13.0.
How big is China’s stock market in ringgit?
China’s stock market capitalisation reached approximately RMB105 trillion to RMB111.5 trillion, or RM68 trillion, by 2026. Its banking sector assets were RMB498 trillion to RMB520 trillion by mid-2026.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
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