Nikkei today: Tokyo’s Nikkei ends above 35,000 for the first time since 1990! According to an AFP report, Tokyo’s Nikkei index closed above 35,000 at the end of the trading session on Thursday, marking the first occurrence in nearly 34 years. This surge was propelled by optimistic expectations for a more robust economy, indicating a potential turnaround from decades of deflation.
Analysts noted that share prices were lifted by rallies in US tech, reaching highs not witnessed since the burst of Japan’s asset price bubble over three decades ago.
The benchmark Nikkei 225 index recorded a 1.77 percent increase, or 608.14 points, closing at 35,049.86. This marks the first instance since February 1990 that the index has concluded a session above the 35,000 level.
The broader Topix index saw a gain of 1.57 percent, adding 38.39 points and closing at 2,482.87.
Senior strategist Ryuta Otsuka of Toyo Securities jokingly remarked that the rapid pace of recent gains “deserves a speeding fine.”
He was quoted as saying that the biggest factor behind the rally is most likely hopes that the Japanese economy will finally get back to normal after years of deflation.
Otsuka mentioned that there is widespread speculation that the Bank of Japan might initiate the tightening of its longstanding monetary easing policies as early as April.
He added that the Japanese market is also receiving support from the gains in US tech shares, particularly driven by chip giant Nvidia.
The Nikkei achieved its all-time high of 38,915 on December 29, 1989, amidst Japan’s boom years spanning from around 1986 to 1990.
In the aftermath of the 1985 Plaza Accord, designed to weaken the dollar and alleviate America’s trade deficit, Japanese authorities implemented easing measures to mitigate the impact of a substantial increase in the yen against the dollar.
Consequently, there was a significant influx of capital into both real estate and stock markets.
However, in 1990, the stock market experienced a sharp decline as the central bank persisted in tightening its policies, and the government implemented stricter regulations on the real estate market. This marked the beginning of Japan’s “lost decades,” characterised by prolonged economic stagnation.
The recent upswings in Japanese shares are, in part, attributed to the implementation of a redesigned tax-free government stocks program for individuals, known as NISA.
On Thursday, the dollar maintained its strength at 145.40 yen, compared to 145.77 yen in New York.
Among notable stocks, Sony Group surged by 3.54 percent, reaching 14,340 yen, Toyota saw a 3.61 percent increase, closing at 2,844 yen, and SoftBank Group experienced a 1.92 percent rise, settling at 6,431 yen.
Specialising in mini-cars, Suzuki saw a notable advancement of 3.86 percent, reaching 6,370 yen. This surge followed the announcement of a $4.2 billion investment for the construction of a new plant in India.
