Nikkei Index Surpasses 42,000 on Tariff Deal for First Time in a Year

Boosted by the US-Japan trade agreement, Japan's leading stock index, the Nikkei 225 Average (Nikkei Index), briefly surpassed the 42,000 mark on the morning of July 24.

As of 2:10 p.m. that day, the Nikkei Index was trading around 41,810. The Nikkei Index showed an upward trend from the market opening and reached 42,004 at 11:06 a.m. This represents an increase of more than 800 points from the previous day's closing price of 41,171.

AP Yonhap News

According to Kyodo News, this is the first time in about a year since July 11 last year that the Nikkei Index has exceeded the 42,000 mark. The Nikkei Index also rose 3.51% the previous day, reaching a new annual high.

Nihon Keizai Shimbun (Nikkei) analyzed that, following the conclusion of the US-Japan tariff negotiations, a Financial Times (FT) report indicating that a deal between the United States and the European Union (EU) was also imminent further supported investor sentiment. It also added that the strong close of the New York stock market on July 23 (local time) had an impact. On that day, both the S&P 500 Index and the Nasdaq Index set new all-time highs once again.

On the morning of July 24, bank-related stocks continued to stand out in the Japanese stock market, following the previous day. Nikkei reported that expectations for economic recovery due to tariff reductions, combined with the Bank of Japan's interest rate hikes, led to concentrated foreign buying.

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