Japan’s world-beating stock rally should continue to fuel sales in both its primary and secondary equity markets through next year, according to BofA Securities Japan Co.

Proceeds from initial public offerings and additional share sales in Japan have reached more than $20 billion so far in 2023, an increase of 3.5 times compared with the same period last year. That’s come as the benchmark Topix has surged about 11% in dollar terms, outpacing gains in a gauge of global peers.

“There is a usually a lag between Japanese market performance and corporate ECM activity, so I think that this trend will continue for the next year or two,” said Shu Nagata, the head of Japan Global Capital Markets at BofA.

Positives including a weak yen, ultra-easy monetary policy and hopes for stable inflation have helped push the Topix to its highest level since 1990. Foreign investment has also picked up, encouraged by the Tokyo Stock Exchange’s drive for higher corporate valuations.

Nagata noted that BofA hosted a Japan conference at the beginning of September which saw increases in participants from the US, Europe and Asia.

“Japan’s market is changing much more than expected,” he said. “There is a feeling of real change to the Japanese economy itself.”

The equity boom has driven a variety of equity deals. While Japanese IPOs “tend to be a longer-term product,” taking about a month from launch to listing, market upswings also drive demand for more short-term deals like block trades, Nagata said.

Three secondary share sales in Tokyo this year so far have topped the $1 billion mark, versus only one last year. In the first quarter, Japan Post Holdings Co. sold close to $8.6 billion worth of shares in its banking unit, marking the world’s largest block trade in nearly two years.

While IPOs have raised lower proceeds than blocks and placements so far this year in Japan, new share sales are picking up as the end of the year approaches. KKR & Co. is seeking to raise about $750 million from an IPO of Kokusai Electric Corp., according to a filing last week. It could be Japan’s largest listing in five years.