JAPAN’S benchmark Nikkei rallied to 34-year highs on Friday (Feb 16) and was on the cusp of eclipsing the all-time peak reached during the hey days of the nation’s bubble economy in the 1980s.
The index blew past the post-economic bubble era record of 38,188.74, putting it on course to surpass the life-time peak of 38,957.44 reached in December 1989.
The Nikkei share average finished the day up 0.86 per cent at 38,487.24. So far, the index is up 14.0 per cent for the year.
“The speed (at which the Nikkei is rising) is faster than I had expected, but I think it’s justified” given fundamental improvements such as corporate governance reform, said Kenji Abe, an analyst at Daiwa Securities.
Of the index’s 225 constituents, 190 advanced and just 34 declined.
The broader Topix closed up 1.27 per cent at 2,624.73.
Japan’s stock market was buoyed by a strong day on Wall Street overnight, with the Nikkei index’s heavyweights climbing.
Toyota Motor gained 0.95 per cent, Fast Retailing was up 1.08 per cent and Recruit Holdings rallied 4.0 per cent.
Semiconductor equipment manufacturer Tokyo Electron, which had been in negative territory for a while, also picked up during the day, eking out a modest 0.4 per cent gain.
Entertainment company Bandai Namco Holdings was the best performer, up 8.05 per cent after taking a tumble the previous day.
In sectors, the oil and coal products Topix subindex rallied 3.96 per cent to come out on top after a brief jump in oil prices overnight.
On the broader economic front, investors were assessing Thursday’s gross domestic production report showing Japan unexpectedly slipped into a recession at the end of last year, and how that will affect the Bank of Japan’s (BOJ) monetary policy outlook.
BOJ Governor Kazuo Ueda told Japan’s parliament on Friday that the central bank will examine whether to maintain its various monetary easing measures, including negative interest rates, when its 2 per cent inflation target comes into sight. REUTERS