Japan’s Nikkei 225 index reached a historic high, surging nearly 2% to hit 39,029, surpassing its previous peak of 38,915 set in 1989, CNBC reports.
The rally in has been fueled by strong corporate earnings, investor optimism, and supportive government measures. Both the Nikkei and the broader Topix index have outperformed other Asian markets, with gains of over 10% so far this year and over 25% in 2023.
The weakening yen has also contributed to the rally, attracting foreign investment in Japanese equities. Toyota and other companies have upgraded their earnings forecasts, benefiting from a weaker yen. However, concerns about the yen’s decline persist, with Japanese government officials monitoring the situation closely.
Despite the positive momentum, Japan’s GDP contracted for a second consecutive quarter, ceding its place as the world’s third-largest economy to Germany. The Bank of Japan is expected to reassess its negative rates policy in April, aiming to stimulate consumer spending amidst high inflation rates.
