2024-01-10 06:41:00
© Archyde.com Japan’s stock market exceeded 34,000 points for the first time in 34 years, setting a new post-bubble high
Investing.com – On Wednesday (10th), as investors bet that the Bank of Japan’s plan to end its ultra-loose policy will be delayed, Japan’s Nikkei 225 index surged, hitting a new high since the bubble burst in the 1990s.
It closed up 2.08% today, breaking through 34,000 points for the first time since January 1990, continuing its continuous rise since mid-2023.
Technology stocks were the best performers, driven higher by a combination of the artificial intelligence boom and expectations of weaker data later this week.
But the biggest factor supporting Japanese stocks was the growing expectation that the Bank of Japan would have to delay plans to end its ultra-dovish policy after a massive earthquake in central Japan killed hundreds of people and caused widespread damage in the region.
Post-disaster reconstruction and fiscal stimulus are widely expected to offset any central bank moves to tighten monetary policy. Previously, the Bank of Japan also maintained a super dovish stance in 2023 despite changing global sentiment.
The Bank of Japan’s extremely dovish stance is one of the main driving forces for the rise of Japanese stocks in 2023. Even as most central banks around the world begin to raise interest rates and end epidemic-era stimulus measures, the Bank of Japan still adheres to its asset purchase and yield control policies.
This week, falling data from Japan and Japan further fueled bets on dovish policy from the Bank of Japan.
Meanwhile, the Nikkei 225 was the best-performing major stock index in 2023, rising about 30% for the year. That compares with an increase of about 24%.
Strong earnings of Japanese companies are also one of the reasons for the Nikkei’s rise in 2023. These companies have withstood the test of the downturn in the global economic situation.
In addition, a rebound in tourism has also supported Japanese companies, with foreign tourists flocking to Japan to take advantage of the lower yen. In 2023, due to the widening interest rate gap between the United States and Japan, it will become the worst-performing major currency.
Still, recent data suggests Japan’s economy may be cooling after growing in 2023. The contraction was larger than expected.
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Compiler: Liu Chuan
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