Tokyo's Nikkei ends above 35,000 for first time since 1990
TOKYO’S Nikkei index closed above 35,000 for the first time in nearly 34 years on Thursday (Jan 11), buoyed by hopes for a perkier economy after decades of deflation.
US tech rallies also lifted share prices, analysts said, following days of highs unseen since Japan’s asset price bubble burst more than three decades ago.
The benchmark Nikkei 225 index rose 1.77 per cent, or 608.14 points, to 35,049.86 – the first time the index has closed above 35,000 since February 1990.
The broader Topix index added 1.57 per cent, or 38.39 points, to 2,482.87.
The pace of recent gains “deserves a speeding fine”, joked senior strategist Ryuta Otsuka of Toyo Securities.
“The biggest factor behind the rally is most likely hopes that the Japanese economy will finally get back to normal after years of deflation,” he told AFP.
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Speculation is rife that the Bank of Japan could tighten its longstanding monetary easing policies as soon as April, Otsuka said.
Gains in US tech shares, led by chip giant Nvidia, are also supporting the Japanese market, he added.
The Nikkei’s all-time high was 38,915 on Dec 29, 1989, during Japan’s boom years from around 1986 to 1990.
Following the 1985 Plaza Accord, aimed at weakening the dollar to reduce America’s trade deficit, Japanese authorities brought in easing measures to cushion the shock of a sharp rise in the yen against the dollar.
That led to a massive flow of cash into real estate and stocks.
But the stock market plunged in 1990 as the central bank continued to tighten its policies and the government strengthened regulation of the real estate market – leading to Japan’s “lost decades” of economic stagnation.
Recent rises in Japanese shares are also partly due to the introduction of a revamped tax-free government stocks programme for individuals, known as NISA.
On Thursday the dollar stood firm at 145.40 yen, against 145.77 yen in New York.
Among major shares, Sony Group jumped 3.54 per cent to 14,340 yen, Toyota climbed 3.61 per cent to 2,844 yen, and SoftBank Group rose 1.92 per cent to 6,431 yen.
Mini-car specialist Suzuki advanced 3.86 per cent to 6,370 yen after announcing a US$4.2 billion investment to construct a new plant in India. AFP
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