Discover the fact where Japan’s Nikkei Hits 34-Year High: Wall Street Impact.
In a remarkable surge, Japan’s Nikkei share average reached a 34-year peak, echoing the climb of Wall Street to a fresh record high.
Despite cautious anticipation of the Bank of Japan’s (BOJ) monetary policy decision, the market showcased resilience.
The decision, widely expected to maintain existing stimulus measures, added momentum to the Nikkei’s ascent.
As of 0125 GMT, the Nikkei rose to 36,877.41, a level not witnessed since February 1990, marking a significant milestone.
Although gains were later trimmed to 0.7%, settling at 36,803.41, the upward trajectory underscored the market’s optimism.
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Chip Shares Propel Nikkei’s Soar
Semiconductor-sector stocks played a pivotal role in driving the Nikkei’s ascent. Companies like Lasertec and Screen Holdings experienced notable gains of 3.25% and 2.27%, respectively.
Heavyweights Tokyo Electron and Advantest also contributed with rises of 0.3% and 0.43%.
The broader Topix index mirrored the upward trend, advancing 0.5% and achieving a fresh multi-decade high.
Notably, the Topix index of growth shares outpaced its value counterparts, jumping 0.84%.
Wall Street’s Influence and Bond Yields
The surge in Japan’s Nikkei followed the footsteps of Wall Street, where the US S&P 500 closed at a record high for the second consecutive session.
Tech stocks emerged as standout winners, contributing to the positive sentiment.
Analysts pointed to the retreat in bond yields as a factor influencing stock behavior.
The 10-year US Treasury yield dipped to 4.075%, down from the previous week’s high of 4.198%.
The combination of subdued yields, firm US stocks, and stable yen levels of around 148 per dollar fueled optimism.
Kazuo Kamitani, an equity strategist at Nomura Securities in Tokyo, highlighted the potential for the Nikkei to reach 37,000 under these conditions.
However, analysts cautioned that the BOJ meeting’s outcome, particularly any clues about exiting negative interest rates, remains a key factor influencing future market dynamics.
BOJ Decision and Market Response
The BOJ’s decision, announced during the market break, maintained the short-term rate target at -0.1% and the 10-year bond yield around 0%, aligning with market expectations.
Attention now turns to BOJ Governor Kazuo Ueda’s news conference scheduled around 0630 GMT.
The market’s positive response to the BOJ decision, coupled with the prevailing favorable conditions, emphasizes the resilience and upward potential of Japan’s Nikkei.
As global economic factors continue to unfold, the Nikkei’s performance remains closely intertwined with both regional and international market dynamics.
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