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Updated January 10th, 2024 at 13:09 IST

Nikkei ends at 34-year high fuelled by tech surge, weaker yen

The broader Topix also saw an upswing, climbing 1.3 per cent to 2,444.48, marking its highest point since March 1990.

Business Desk
Japan's Nikkei rebounds
Fast Retailing, the operator of the Uniqlo clothing retail chain, surged 3.83% | Image:Pexels
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Japan's Nikkei share average soared to its highest level in 34 years, closing at 34,441.72, a peak not witnessed since February 1990. The index's breakthrough past the 34,000 mark, a first since March 1990, was attributed to the robust performance of technology shares, mirroring gains in US counterparts, and the favourable impact of a weaker yen on exporters.

The broader Topix also saw an upswing, climbing 1.3 per cent to 2,444.48, marking its highest point since March 1990. Analysts noted that the Nikkei's ascent to the 34,000 level triggered increased investor interest and buying activity.

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Masahiro Ichikawa, Chief Market Strategist at Sumitomo Mitsui DS Asset Management, stated, "The Nikkei rallied to the 34,000 level, and that prompted investors to buy more stocks."

While the S&P 500 and Dow recorded lower closes in the US market, the tech-heavy Nasdaq posted marginal gains. The Japanese yen's depreciation against the dollar ahead of upcoming US inflation data proved advantageous for Japanese stocks. A softer yen is beneficial for exporters as it amplifies the value of overseas profits when repatriated to Japan.

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Fast Retailing, the operator of the Uniqlo clothing retail chain, surged 3.83 per cent, claiming the top spot as the Nikkei's biggest contributor. Tokyo Electron, a chip-making equipment manufacturer, gained 1.91 per cent, and ceramics maker Kyocera saw a notable increase of 6.09 per cent. Sony Group and Keyence emerged as key drivers for the Topix, rising by 3.82 per cent and 4.86 per cent, respectively.

Despite the overall positive trend, computer maker Fujitsu experienced a 1.94 per cent decline, marking the most substantial percentage decrease. Of the 225 components, 176 shares recorded gains, 47 saw declines, and two remained unchanged.

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Analysts remain vigilant about the potential impact of US inflation data on the Federal Reserve's policy, which could influence the trajectory of the Nikkei in the coming sessions. The current market dynamics reflect the ongoing interplay between global economic factors and regional market sentiment.

(With Reuters inputs)

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Published January 10th, 2024 at 13:09 IST

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