Japan’s Primary Stock Index Surpasses Record High
Japan’s main stock index, the Nikkei 225, has achieved an all-time closing high, surpassing the previous record set 34 years ago.
The index rose 2.19% on Thursday to close at 39,098.68, exceeding the previous record of 38,915.87 set on December 29, 1989. The surge was attributed to the strong earnings of Asian technology shares, particularly after US chip giant Nvidia reported robust earnings driven by demand for its artificial intelligence processors. Despite Japan’s economy falling into a recession, global investors are returning to the benchmark index due to strong company earnings.
Additionally, the depreciation of the Japanese currency has contributed to the boost in share prices for exporters, making their products more affordable in international markets. The Nikkei 225’s previous peak occurred after years of escalating stock and property prices, but less than three years later, it experienced a nearly 60% loss amid an economic crisis. Since then, Japan has grappled with minimal economic growth and deflation, where falling prices discourage consumer spending on major purchases.
Recently, official figures revealed that Japan unexpectedly entered a recession in the last quarter of 2023, with a worse-than-expected 0.4% contraction compared to a year earlier. This economic downturn follows a 3.3% contraction in the previous quarter. According to the latest figures from the country’s Cabinet Office, Japan has also lost its position as the world’s third-largest economy to Germany. Two consecutive quarters of economic contraction typically define a technical recession.
