In a remarkable rise, Japan’s Nikkei share average reached a fresh 34-year high on Tuesday, marking its highest level since January 1990. The index closed at 37,963.97, up 2.89%, with tech-related shares leading the charge.
Tokyo Electron, a key player in the chip sector, stood out as the best performer of the day, soaring by 13.33%. This impressive climb was complemented by SoftBank Group Corp’s 6.27% rise, boosted by the rally in semiconductor developer ARM Holding, in which SoftBank holds a 90% stake.
Other top gainers included insurance giants Tokio Marine Holdings Inc and MS&AD Insurance Group Holdings Inc, which gained 11% and 10.82%, respectively.
The broader Topix index also experienced a significant increase, rising by 2.12% alongside the Nikkei’s strong performance.
This surge in Japanese equities was further fueled by a robust performance on Wall Street and a weakened yen, which enhanced the value of overseas revenue for exporters. The yen traded around 149.47 per dollar during the session, adding to the favorable conditions for Japanese exporters.
JP Morgan analysts recently revised their outlook for Japanese equities in 2024, citing macroeconomic conditions and progress on structural reforms. They raised their forecast for the Topix from 2,500 to 2,650 and for the Nikkei 225 from 35,000 to 37,000.
As the Nikkei approaches its all-time high, market watchers are closely monitoring the US consumer price index (CPI) report, scheduled for release later on Tuesday. The report’s impact on the yen could potentially disrupt the Nikkei’s rally, as recent movements in the index have been closely tied to the yen’s strength.
With 196 of the Nikkei’s 225 constituents recording gains, the index’s upward trajectory reflects the optimism and resilience of the Japanese market amidst global economic uncertainties.
(Source: Reuters | CNBC | Nikkei Asia)
