Nikkei posts record fiscal-year gain amid foreign buying surge

Japan's Nikkei share average ended the fiscal year on a high note, registering its biggest point gain and a remarkable 44 per cent increase, fuelled by heavy foreign buying and optimistic market sentiment.

Throughout the fiscal year, the index soared by an impressive 12,328 points, marking its biggest absolute gain to date. The surge in performance was attributed to the chip-related heavyweights and a favourable outlook on loose monetary policy from the Bank of Japan.

Foreign investors played a key role in driving the market rally, taking advantage of a weaker yen and bolstering expectations of continued loose monetary policies. The recent decline in the yen to a 34-year low against the dollar spurred concerns among local authorities, hinting at possible intervention in the currency market.

Despite cautious sentiments regarding potential currency market interventions, investors largely perceived the weak yen as a boon for domestic stocks. Chip-related companies like Tokyo Electron and Advantest witnessed notable gains, contributing to the overall positive momentum.

The property sector also witnessed growth, propelled by a government survey indicating an increase in land prices, the highest in 33 years. Optimism surrounding the Bank of Japan's gradual approach to interest rate hikes further bolstered stock prices in the sector.

The broader Topix index also closed higher, reflecting the overall positive sentiment in the Japanese equities market. As the fiscal year draws to a close, investors remain cautiously optimistic about the market outlook, buoyed by robust foreign investment and favourable economic indicators.

(With Reuters inputs)