The comparison of macroeconomic development between the united states and japan in recent in recent years is analyzed from nasdaq and nikkei index

Faculty of Business, Economics & Law, The University of Queensland, St Lucia, Brisbane QLD, 4072, Australia

^* Corresponding author: rongzhan.deng@uqconnect.edu.au

Abstract

The changes in the Nasdaq and Nikkei over the past in recent years offer valuable insights for evaluating macroeconomic developments in the United States and Japan. Through an analysis of these two indicators, this paper can initially draw conclusions about the state of both countries’ economies. Over the past three years, the Nasdaq index has exhibited a relatively stable growth trend, maintaining strong overall growth despite fluctuations caused by global uncertainties. This may reflect advancements in areas such as technological innovation and the Internet sector, as well as investors’ optimism regarding future prospects. In contrast, the Nikkei index has displayed a more intricate and volatile pattern during this same period. While there have been some gains, it has experienced an overall decline marked by shocks. This could be attributed to various challenges faced by Japan including an aging population, low growth rate, and declining corporate competitiveness. The objective of this paper is to explore a similar model that explains stock markets in both the US and Japan. Many long-term investors base their stock decisions on the assumption that corporate cash flows should grow alongside economic performance while considering a constant or slow-moving discount rate. Therefore, it is expected that stock returns may exhibit correlation with future economic performance. Another concern worth addressing is how deflation might impact real stock returns.