Japan’s Nikkei surged past 39,000 points for the first time since September, thanks to semiconductor stocks and China’s economic stimulus.
Japan’s Nikkei share average edged up by 0.1%, reaching 38,964.65 by midday. For a brief moment, it broke past the 39,000-point mark. This increase was largely due to the strong performance of semiconductor-related shares, which were influenced by rallies on Wall Street. The S&P 500 had recently set a new record, boosting investor confidence. Key companies leading these gains were Tokyo Electron, up by 4.2%, Lasertec rising 5.1%, Fanuc with a 4.4% increase, and Yaskawa Electric climbing 3.7%. The surge in US chipmaker Micron Technology’s revenue forecast also played a significant role in this upward trend. Adding to this momentum was China’s latest economic stimulus measures, which contributed to the best week for Chinese stocks since 2008. However, despite these positive signs, investor caution remains due to the upcoming leadership election in Japan’s Liberal Democratic Party. Sanae Takaichi, a key contender, has economic policies that could potentially influence the market’s future.
For those invested in the markets, the performance of semiconductor stocks is a critical indicator of global optimism. The Nikkei’s rise signals broader market confidence, particularly in the semiconductor industry, which is benefiting from the ongoing advancements in AI technology. Stocks such as Tokyo Electron, Fanuc, and Micron Technology continue to perform strongly and show potential for further growth.
Japan’s political landscape also remains an important factor to watch. The outcome of the leadership election could shape future economic policies. Sanae Takaichi’s stance, particularly her support for ‘Abenomics’ and opposition to interest rate hikes, may provide short-term benefits for the market. However, questions remain about the long-term sustainability of such policies. Investors should pay close attention to these developments, as they could have wider implications for the economy.
Fidelity Japan Trust PLC (LON:FJV) aims to be the key investment of choice for those seeking Japanese companies exposure. The Trust has a ‘growth at reasonable price’ (GARP) investment style and approach – which involves identifying companies whose growth prospects are being under-appreciated or are not fully recognised by other investors.
