Japan’s Nikkei surpasses 40,000 points for 1st time
— Japan’s main stock benchmark breached 40,000 points for the first time to end Monday at a record closing high, as corporate governance reform and solid valuations continue to pave the way for long-term global investor interest.
As technology shares jumped, tracking their U.S. counterparts, the Nikkei share average finished the day up 0.5 percent at 40,109.23.
After five consecutive weeks of gains, the index smashed through the fresh intraday peak of 39,990.23 hit on Friday and rose as high as 40,314.64 before momentum eased in the afternoon session.
While there may be short-term moves as the market heats up, “I think the market will continue to rise,” said Masahiro Ichikawa, chief
market strategist at Sumitomo Mitsui DS Asset Management.
Overseas investors have been leading
the buying, and many seem to be investing from a medium- to longterm perspective, he said.
Some analysts estimate Japanese equities could rise further this year on the back of long-term changes in company behavior, with one forecast calling for as high as 43,000 points, according to a Reuters poll published on Feb. 22. The median 2024 year-end forecast for the Nikkei was 39,000.
While foreign interest has helped to fuel the Nikkei’s rapid rise, some see the continued rally as a gradual turning point for domestic retail investors, who have largely given Japan’s stocks the cold shoulder.
Purchases of Japan-focused exchange-traded funds that qualify for local tax breaks have surged lately, said Wei Li, portfolio manager at BNP Paribas Asset Management.