Nikkei Index Hits Record High for 3 Consecutive Trading Days on US Tailwind

The Nikkei 225 index, a representative stock index of the Japanese stock market, hit an all-time high for the third consecutive trading day, buoyed by positive momentum from the U.S.

On the 11th at the Tokyo Stock Exchange, the Nikkei 225 closed at 42,224.02, up 0.94% from the previous session. This is the first time the index has surpassed the 42,000 mark at closing. Shortly after the opening, it even broke through the 42,426 level. The Nikkei 225 has been on a record-breaking streak since the 9th.

[Image source=Reuters Yonhap News]

This is analyzed as an effect of broad capital inflows into the Tokyo market, following the surge in investor sentiment after the S&P 500 index in the U.S. New York Stock Exchange hit an all-time high. The Nihon Keizai Shimbun evaluated that a reappraisal of Japanese stocks among overseas investors, corporate share buybacks, and rebalancing (asset allocation adjustments) by institutional investors also acted as positive factors.

By individual stocks, gains were confirmed mainly among large-cap stocks such as Fast Retailing, Daiichi Sankyo, and Sony Group. Yoshiki Suda, an analyst at Nomura Securities, explained, "There were purchases by Asian investors shifting funds from Chinese stocks to Japanese stocks," adding, "Corporate share buybacks, changes among 'contrarian' individual investors, and rebalancing by European passive institutional investors were the main reasons."

On the same day, the TOPIX index also rose 0.69% from the previous session, reaching an all-time high. The day before, BlackRock Investment Institute (BII) stated in a report that "Japanese stocks are the most confident investment destination due to moderate inflation easing, reforms by shareholder-friendly Japanese companies, and the Bank of Japan's (BOJ) cautious monetary policy."

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