Japan’s Topix stock index soared to a 34-year high, closing at 2,816.51, with tech stocks driving the gains despite looming global economic concerns. The Topix index’s rise to 2,821.86 earlier in the day marks its highest point since January 1990, signalling renewed investor confidence in Japan’s market. This bullish trend saw value shares outperform growth shares, with the value sub-index climbing 1.05%, significantly outpacing the 0.56% rise in growth shares. Meanwhile, the tech-heavy Nikkei index went up by 0.98% to 29,727.91, rebounding from a previous drop but remaining just below Wednesday’s peak. Leading the charge were insurance, banking, and securities sectors, each posting significant gains. However, market sentiment was tempered by concerns over upcoming US inflation data and the French elections this weekend. A notable spike in benchmark 10-year Japanese government bond yields to 1.08% also reflected strong local consumer price data, suggesting a potential rate increase from the Bank of Japan in July.
Tech stocks played a major role in boosting Japan’s indices. AI-focused SoftBank Group surged 3.21%, becoming the top gainer on the Nikkei. Tokyo Electron, a giant in chip-making equipment, rose by 1.61%, while Advantest, a manufacturer of chip-testing machinery, climbed 3.33%. Lasertec topped this performance, jumping more than 4%. These gains reflect strong investor interest in the tech sector, driven by its potential to innovate and lead market growth.
Japan’s stock market rally comes at a time of cautious global sentiment. Investors are eyeing the upcoming US inflation data for signs of future economic trends, while the French elections add a layer of geopolitical uncertainty. Despite these potential headwinds, Japan’s market performance highlights investor optimism about domestic economic stability and growth prospects. The potential for a Bank of Japan rate hike, driven by strong consumer price data, only adds to the dynamic economic landscape.
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