Japan’s benchmark stock index has reached a significant milestone, surpassing the 40000 mark for the first time in history. This remarkable achievement is attributed to increased corporate earnings and a significant rise in chip-related stocks, fueled by the growing enthusiasm for artificial intelligence technologies among investors.
Record High Achieved
The Nikkei Stock Average recently saw a 0.9% rise, reaching a value of 40258.41 on a Monday morning. This positive momentum comes after the index hit an all-time high on February 22, marking a historic moment as it surpassed the previous record set during the Japanese asset bubble of 1989. Since then, the index has continued to break new records, reflecting the strong performance of the Japanese stock market.
Strong Performance Driven by Various Factors
So far this year, the Nikkei Stock Average has surged by 19%, following a 28% increase in 2023. This upward trajectory can be attributed to several factors such as the return of modest inflation, improvements in corporate governance, and a weaker yen. The depreciation of the yen has enhanced the value of corporate profits earned overseas when converted back into yen, contributing to the overall growth of the market. Notably, the recent spike in chip-related stocks has played a significant role in driving the latest gains in the market.
Overcoming Past Challenges
Despite facing challenges of deflation and slow growth in previous years, the Japanese stock market has shown resilience and strong performance in recent times, outperforming expectations and surpassing milestones that were once deemed unattainable.
The future looks promising for investors and market participants as Japan’s stock market continues to demonstrate robust growth and upward momentum.