(Bloomberg) -- Japan’s Nikkei 225 Stock Average has doubled since its pandemic low as investors continue to rush into one of this year’s biggest stock rallies. 

The blue-chip equity gauge rose 1.5% Wednesday, taking the gain from its March 2020 low to 102%. That’s the best in the Asia Pacific region in that span, after the more than 120% surge in India’s Sensex.

Stocks have soared in Tokyo this year on drivers including signs of stable inflation, corporate governance reforms and an inflow of foreign investment amid an endorsement from Warren Buffett. These have supplemented tailwinds from the Bank of Japan’s easy-money policy and benefits from a weak yen for the nation’s exporters.

The One Stock Market That Loves Inflation Is Booming in Japan

“Japan markets remain attractive as a confluence of factors is playing out,” said Charu Chanana, a strategist at Saxo Capital Markets. “The global fragmentation game of US-China decoupling also continues to push manufacturers and investors toward Tokyo amid de-risking strategies.”

The Nikkei’s 28% gain so far this year ranks top among the world’s major equity benchmarks, but the index remains about 14% below its all-time set in 1989 at the height of Japan’s bubble economy. Still, some observers warn on technical signs of overheating amid external risks including geopolitcal tensions and a possible US recession.

Investors will take their next cues from the BOJ’s decision due Friday, with all eyes on when the nation’s era of ultra-low interest rates may end. Reports that Prime Minister Fumio Kishida is considering calling an early election could represent another potential challenge to the rally.

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