Japan’s primary stock index, the Nikkei, reached a historic milestone by surpassing the 40,000-point mark for the first time on Monday. This surge follows a trend of continuous growth this year, fueled by corporate governance reforms and attractive valuations.
Driven by a surge in technology stocks, mirroring gains seen in the US market, the Nikkei share average rose by 0.79% to reach 40,226.83 by midday, surpassing the previous intraday high of 39,990.23 set on Friday.
Foreign investors, particularly those with medium- to long-term investment horizons, are leading the buying spree, according to Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management. He believes that the market’s upward trajectory is likely to persist.
Japanese tech companies benefitted from the momentum in US artificial intelligence stocks, which drove the S&P 500 and Nasdaq to record highs on Friday. Advantest, a chip-testing equipment manufacturer with ties to US AI firm Nvidia, saw its shares rise by 3.9%. Tokyo Electron, a major chip-making equipment company, also experienced a 2.7% increase.
The collective performance of these tech giants contributed significantly to the Nikkei’s overall gain during the morning session. Additionally, Shin-Etsu Chemical, a leading manufacturer of semiconductor silicon products, saw its shares rise by 2.2%, further bolstering the index’s upward movement.