Buoyed by strong buying from overseas and retail investors, the Japanese stock market has posted its strongest start in decades. The Topix and Nikkei 225 indices rose further on Tuesday, bringing their two-day gains to 3.8% and 4.3%, respectively. Data shows this marks the strongest performance in the first two trading days of the year since 1990. Buying activity in large-cap blue-chip stocks was particularly notable. Hideyuki Ishiguro, chief strategist at Nomura Asset Management, said: “ 'Compared to U.S. stocks, Japanese stocks remain undervalued, and foreign investors are showing strong interest in core stocks.' The strong momentum in Japanese stocks stems not only from the resilience of U.S. stocks amid expectations of interest rate cuts but also from market expectations of improving corporate earnings, strengthened corporate governance, and Prime Minister Sanae Takaichi’s growth-promoting policies. Masayuki Doshida, a senior market analyst at Rakuten Securities, noted that stock prices have largely priced in expectations of an upcoming earnings recovery. “If earnings exceed market expectations, the Nikkei 225 could reach 55,000 points or even higher.” The index closed at a record high of 52,518.08 points on Tuesday.