Nikkei at its peak: Tokyo Stock Exchange hits historic milestone of 40,000 points

Asian markets start the week in a contagiously optimistic mood. The flagship index of the Tokyo Stock Exchange soars, surpassing this symbolic threshold from the get-go, and closing the session with a 0.5% increase. The Nikkei 225 appears insatiable, displaying a remarkable climb of 20% since the start of the year, thus shattering its historical records dating back to December 1989.

The Tokyo Nikkei Crosses 40,000 Points, Driven by Technological Momentum

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*ASIAN STOCKS RISE TO START THE WEEK AS JAPAN'S NIKKEI BREACHES 40,000 LEVEL FOR THE FIRST TIME https://t.co/iajDw6Dbhs 👈

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The frenzy reigns at the Tokyo Stock Exchange as the star index, the Nikkei 225, breaches the 40,000-point mark for the first time at the opening, ending the day at 40,109 points, thereby recording a rise of 0.5%.

The vitality of the Japanese market is fueled by several factors, notably the persistent weakness of the yen, boosting the profits of Japanese companies abroad while making their stocks attractive to foreign investors. Moreover, Japanese companies are now rewarding their shareholders more with generous dividends and more frequent share buyback programs. Finally, the unstable situation of the Chinese financial markets is leading investors to look for alternatives, thus benefiting the Tokyo Stock Exchange.

“We believe that Japan will be one of the most performing markets between 2023 and 2030. The big story of the return for shareholders in Japan has begun,” comment the analysts at Jefferies in a research report published yesterday quoted by CNN.

This Monday, the upward trend of the Nikkei is boosted by the impressive performances of technology stocks, following the momentum of Wall Street and particularly the performance of Nvidia, which recently passed the $2 trillion market capitalization mark. The Japanese semiconductor companies, such as Tokyo Electron and Advantest, have also contributed to the rise, with respective gains of 2.4% and 3.7%.

The optimism around semiconductors has also energized the Taiwanese stock market, where the benchmark index reached a record level, driven by the performances of Taiwan Semiconductor Manufacturing Company. The world’s largest contract chipmaker saw a 5.2% increase, reaching its all-time high.

China in Waiting: Investors’ Eyes on the National People’s Congress

Chinese stocks make modest gains, with investors hanging on the upcoming decisions of the National People’s Congress. This annual meeting, which brings together 3,000 delegates in Beijing, is expected to unveil growth objectives for 2024 as well as potential economic stimulus measures. The markets are holding their breath before the announcement of these crucial directions.

As for the Tokyo Stock Exchange, it has already set several record levels in recent months, even eclipsing its previous historic peaks of December 1989. This positive momentum is a continuation of the exceptional performance of 2023, with the Nikkei 225 having jumped by nearly 20% since January after a 28% increase the previous year.