TOKYO, Sept 19 (Reuters) - The value of Japanese stocks hit a record high on Tuesday, hitting a welcome milestone for Prime Minister Shinzo Abe, who might call a snap election soon in a bid to bolster his power.
The total market capitalisation of more than 2,000 Japanese companies listed on the Tokyo Stock Exchange's main board hit 613.7 trillion yen ($5.49 trillion), surpassing the 609.6 trillion yen reached in August 2015.
The market got a renewed boost on Tuesday from easing concerns over North Korea and hopes of a snap election that could solidify Abe's position.
The Topix index, which covers all shares listed on the TSE's main board, hit a two-year high of 1,669 on Tuesday, near its 2015 peak of 1,703.
The index is still way below its record peak of 2,885 touched in 1989.
At present, the number of listed firms is 2,027, compared with 1,161 in 1989.
"Investors are buying, as Japanese shares had been a bit of laggard as share prices in many places are hitting record highs," said Nobuhiko Kuramochi, chief strategist at Mizuho Securities.
While the increase in the value of stocks may please investors, some market players also noted Japan's economic growth has not gained as much momentum as expected despite Abe's massive stimulus.
Japanese market cap now is more than 110 percent of Japan's gross domestic product (GDP), the highest level since the early 1990s.
Veteran investor Warren Buffett has said the ratio is one of the best measure of stocks' valuation, with figures above 100 percent seen as suggesting share prices are on the expensive side historically.
Still, analysts say the Tokyo market does not seem to be that expensive by some other yardsticks.
The market's price-to-earnings ratio, based on 12-month forward earnings, is around 14.5.
"Japanese stocks are still cheap. Earnings are pretty good and we can be sure that there will be a lot of upward revisions when companies announce half-year results (next month)," said Shingo Ide, chief equity strategist at NLI Research Institute.
When Abe took office in December 2012, the market value was 289 trillion yen - 53 percent less than Tuesday's figure.
($1 = 111.69 yen)
(Reporting by Hideyuki Sano; Editing by Richard Borsuk)