Japan's benchmark stock index surged to a new record on Wednesday, extending a three-day winning streak across Asian markets. The Nikkei 225 closed at 39,234.86 points, surpassing its previous peak set in 1989. The rise follows strong corporate earnings and growing optimism over Japan's economic recovery.
The Tokyo Stock Exchange's gains were led by blue-chip exporters such as Toyota and Sony, which benefited from a weaker yen and robust demand in key markets. The yen's decline to a 34-year low against the dollar has boosted the competitiveness of Japanese goods abroad. Analysts at Mitsubishi UFJ Morgan Stanley Securities attributed the rally to improved corporate governance and share buyback programs.
Regional markets mirrored Tokyo's gains. South Korea's Kospi rose 1.1%, while Hong Kong's Hang Seng climbed 0.8%. Investors are closely watching the U.S. Federal Reserve's next policy move, with expectations of a potential rate cut later this year. The Fed's decision could further influence global capital flows into Asian equities.
The Bank of Japan held its benchmark interest rate steady at 0.1% last week, signaling confidence in inflation trends. Consumer prices in Japan increased 2.8% year-on-year in March, staying above the central bank's 2% target for over a year. The central bank's cautious stance contrasts with other major economies tightening monetary policy.
The rally has lifted investor sentiment, though some warn of overheating in certain sectors. The Topix index, which tracks all domestic stocks on the First Section of the Tokyo Stock Exchange, also reached a 34-year high. Brokerages have revised upward their earnings forecasts for Japanese firms, citing strong export performance and domestic demand recovery.
Source: e24.no