After a bleak summer, the stars appear to be realigning for Japan after the nation won a highly-contested race to host the 2020 Summer Olympics and posted revised second-quarter growth figures that were stronger than initially estimated.
(Read more: Japan growth revised up sharply for second quarter)
"Japan winning the [bid to host the] 2020 summer Olympics is a massive boost to Japanese confidence. Business confidence will improve as industries see the effects of increased government and private spending over the next seven years, plus never discount 'national pride' and the effect it will have on consumer spending and household spending," Evan Lucas, market strategist at IG Markets wrote on Monday.
"For an economy that is desperate to snap out of 20 years of deflation this is a huge shot in the arm," he added.
Hosting the sporting event, which is held every four years, is a perfect means for bringing Prime Minister Shinzo Abe's "Japan Is Back" strategy to fruition, say analysts.
(Read more: Tokyo to host 2020 Summer Olympics)
"One of the most important things is globalizing Japan; we need to have foreigners in Tokyo, young people coming in to work. Having a big international party is exactly what we need, it's a perfect match to Abenomics and the government's plans," said Japan economist Martin Schulz of Fujitsu Research Institute.