Japan’s Nikkei Hits A 34-Year Top

Following a lengthy weekend of holidays, trading resumed on Tuesday, and the benchmark stock index of Japan, which is supported by tech-related equities and good corporate results, closed at a new 34-year high.

After momentarily breaking beyond 38,000 points, the Nikkei increased 2.89% to 37,963.97, its highest level since January 1990. Overall, the Topix increased 2.12%.

Tokyo Electron, a leader in the chip industry, gained 13.33%, making it the day’s best performer.

Gains in chip developer ARM Holding, in which SoftBank owns a 90% share, helped SoftBank Group Corp rise 6.27%.

Gains of 11% and 10.82%, respectively, were recorded by Tokio Marine Holdings Inc and MS&AD Insurance Group Holdings Inc, two other top gainers.

Strengthening Wall Street performance and a weakening yen also helped Japanese equities, increasing the value of exporters’ foreign revenue.

Over the course of the day, the yen fluctuated between 149.47 and $1.04.

“We have raised our outlook for Japanese equities in 2024 (from 2,500 to 2,650 for Topix, from 35,000 to 37,000 for the Nikkei 225), taking into account changes in macroeconomic conditions, including the yen weakening early in the year, and progress on structural reforms,”Earlier this month, JP Morgan analysts said in a research note.

196 of the 225 components that make up the index had advances, while 26 saw declines.

The US consumer price index (CPI) report that will be published later on Tuesday will be the main focus as the Nikkei approaches its record high.

“Nikkei moves have been more closely tied to the yen recently, suggesting that any yen strength on the back of US CPI release today, or signs of verbal intervention, could tactically disrupt the rally in Nikkei,”stated Charu Chanana, Saxo Markets’ head of currency strategy.

Among the losers was Otsuka Holdings, which saw a 5.05% decrease after the company said that a key late-stage trial objective for treating agitation linked to dementia caused by Alzheimer’s disease was not met by its experimental medication