On Tuesday, Japan’s Nikkei 225 index reached an all-time high, driven by strong performances in technology stocks and a weakening yen, which increased the attractiveness of export-oriented shares and led to a rise in foreign investments in local markets.
The Nikkei 225 climbed by over 1% to finish at 41,283.0 points, surpassing its previous record from late March. Additionally, the broader TOPIX index experienced a 0.3% increase, remaining near its recent peak from the prior week.
The upswing in the Nikkei was predominantly attributed to the technology sector, following gains in U.S. tech stocks. Investors are showing optimism about the industry’s growth potential associated with artificial intelligence. A report from Nikkei Asia indicated that major Japanese semiconductor manufacturers like Sony are planning to invest around $5 billion to boost their production capabilities over the coming five years.
Export-centric stocks also experienced favorable outcomes, benefiting from a weakening yen, which has fallen to its lowest level in 38 years. This depreciation has made Japanese products more competitive internationally, attracting foreign investors to the market.
The recent gains in Japanese stock markets come after a series of lackluster economic indicators, prompting speculation that the Bank of Japan may have limited room for further tightening of monetary policy following a significant rate hike in March. This outlook has contributed to the decline of the yen and spurred foreign investments in Japanese equities. Data from late June revealed that foreign purchases of Japanese stocks reached their highest level in over two and a half months.
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