Japan’s main stock index, the Nikkei 225, has soared to record heights, closing above its previous peak set in 1989. The index rose by 2.19% on Thursday, reaching a closing high of 39,098.68, surpassing the previous record of 38,915.87 achieved 34 years ago.
The impressive performance of the Asian technology sector, driven by strong earnings from US chip giant Nvidia, has significantly contributed to the Nikkei’s rally. Additionally, the depreciation of the Japanese currency has boosted the share prices of Japanese exporters, making their products more competitive in international markets.
Despite facing economic challenges, Japan’s stock market has attracted global investors due to robust company earnings, even amid recessionary pressures. The Japanese economy recently slipped into recession, with GDP contracting by 0.4% in the last quarter of 2023, following a 3.3% decline in the previous quarter. This economic downturn has led to Japan losing its position as the world’s third-largest economy to Germany.
The country’s struggles with economic stagnation and deflation have been ongoing since the market peaked in 1989. However, the recent market rally suggests renewed investor confidence and optimism in Japan’s economic prospects. The current surge in stock prices reflects a positive outlook for the Japanese market, despite the prevailing economic challenges.
This milestone achievement for Japan’s stock market marks a significant turning point, signaling a potential recovery from years of economic hardship. As global markets continue to navigate uncertainties, Japan’s resurgence in the financial arena offers a glimmer of hope for the country’s economic revival.
