Nikkei Might Hit All-Time High, Backed by Buying from Foreign Investors

Jiji Press

17:35 JST, February 18, 2024

TOKYO (Jiji Press) — The benchmark Nikkei 225 stock average may hit an all-time high this week, backed by continued buying mainly from foreign investors who expect Japanese stock prices to rise further.

The Nikkei index climbed by about 1,600 points in the four-day week last week, closing at 38,487.24 as investors actively hunted for semiconductor-related shares amid growing interest in artificial intelligence technology.

The index rose to as high as 38,865.06 on Friday, just shy of its record closing high of 38,915.87 marked on the final trading day of 1989 during the height of the country’s speculation-driven bubble economy.

Gains in chipmaking equipment maker Tokyo Electron and SoftBank Group, which has a stake in British chip designer Arm, together made up about half of the Nikkei index’s rise of over 1,000 points marked on Tuesday. Shares of chip-related companies that support AI are a “market driver,” an official at a major securities house said.

Meanwhile, some issues came under selling pressure as a sense of caution grew among investors about a possible plunge in prices after the surge. “There is no sense of overheating when it comes to individual issues,” an official at a midsize securities house said.

This week, the Nikkei is expected to move between roughly 38,000 and 39,500.

The U.S. and Japanese stock markets are scheduled to be closed Monday and Feb. 23, respectively. Trading volume may be thin in the first half of the week as investors are largely expected to stay sidelined after major Japanese companies released their earnings results.

Chip-linked issues are likely to be affected by U.S. semiconductor giant Nvidia Corp.’s earnings results, due out Wednesday.