Nikkei Soars to within Sight of All-Time Peak, Closes at 34-year High (Update 1)

Reuters

12:52 JST, February 16, 2024 (updated at 16:00 JST)

TOKYO, Feb 16 (Reuters) – Japan’s benchmark Nikkei rallied to 34-year highs on Friday and was on the cusp of eclipsing the all-time peak reached during the hey days of the nation’s bubble economy in the 1980s.

The index blew past the post-economic bubble era record of 38,188.74, putting it on course to surpass the life-time peak of 38,957.44 reached in December 1989.

The Nikkei share average finished the day up 0.86% at 38,487.24. So far, the index is up 14.0% for the year.

The speed (at which the Nikkei is rising) is faster than I had expected, but I think it’s justified given fundamental improvements such as corporate governance reform, said Kenji Abe, an analyst at Daiwa Securities.

Of the index’s 225 constituents, 190 advanced and just 34 declined.

The broader Topix closed up 1.27% at 2624.73.

Japan’s stock market was buoyed by a strong day on Wall Street overnight, with the Nikkei index’s heavyweights climbing.

Toyota Motor gained 0.95%, Fast Retailing was up 1.08% and Recruit Holdings rallied 4.0%.

Semiconductor equipment manufacturer Tokyo Electron, which had been in negative territory for a while, also picked up during the day, eking out a modest 0.4% gain.

Entertainment company Bandai Namco Holdings Inc was the best performer, up 8.05% after taking a tumble the previous day.

In sectors, the oil and coal products Topix subindex rallied 3.96% to come out on top after a brief jump in oil prices overnight.

On the broader economic front, investors were assessing Thursday’s gross domestic production report showing Japan unexpectedly slipped into a recession at the end of last year, and how that will affect the Bank of Japan’s (BOJ) monetary policy outlook.

BOJ Governor Kazuo Ueda told Japan’s parliament on Friday that the central bank will examine whether to maintain its various monetary easing measures, including negative interest rates, when its 2% inflation target comes into sight.