On Tuesday, the Nikkei 225 index in Japan achieved a record high, bolstered by robust technology stock performances and a declining yen that enhanced the appeal of export-oriented shares, resulting in heightened foreign investment in local markets.
The Nikkei 225 rose more than 1%, closing at 41,283.0 points, eclipsing the previous milestone reached in late March. The broader TOPIX index also reported gains, increasing by 0.3% and remaining near its own all-time high set just a week earlier.
The advance of the Nikkei was largely fueled by the technology sector, following a surge in U.S. tech stocks. Investors are feeling optimistic about the growth potential in this area, particularly due to advancements in artificial intelligence. A report from Nikkei Asia noted that leading Japanese chip manufacturers like Sony aim to invest approximately $5 billion to expand production capabilities over the next five years.
Stocks focused on exports also displayed strong performance, benefiting from the depreciating Japanese yen, which has fallen to its lowest point in 38 years. This decline has made Japanese exports more competitive on the global stage, attracting foreign investors to the Japanese market.
The recent upward trend in Japanese markets follows a series of unfavorable economic indicators that suggest the Bank of Japan may have limited capacity to tighten its monetary policy further after a significant rate increase in March. This outlook has played a role in the yen’s depreciation and has spurred an uptick in foreign investments in Japanese equities. Data from the final week of June shows that foreign purchases of Japanese stocks hit their highest levels in over two and a half months.
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