Tokyo’s stock indexes hit fresh all-time highs on Thursday, with the Nikkei crossing the 42,000 mark for the first time. This surge was driven by buying in Apple Inc. suppliers and other technology stocks, coupled with optimism about corporate earnings. The 225-issue Nikkei Stock Average rose by 392.03 points, or 0.94 percent, from Wednesday, ending at 42,224.02. Meanwhile, the broader Topix index climbed 19.97 points, or 0.69 percent, to finish at 2,929.17.
In the Prime Market, notable gainers included metal product, mining, and pharmaceutical issues. The U.S. dollar maintained a firm position in the upper 161 yen range in Tokyo, as the rise in U.S. and Japanese stocks prompted investors to sell the yen, a traditional safe-haven asset.
Apple suppliers experienced a surge following a report indicating Apple’s intention to increase iPhone shipments in the latter half of 2024 compared to the previous year. Semiconductor-related stocks were also buoyed by the Nasdaq’s record-high finish overnight, driven by hopes for an early interest rate cut in the United States.
Recently, the Nikkei and Topix indexes have reached record highs, with the Nikkei gaining more than 2,600 points since the start of July. Market boosters included reduced uncertainty regarding the U.S. presidential election, with former President Donald Trump perceived as leading over incumbent Joe Biden, who had a poor performance in their recent debate. Additionally, strong domestic earnings for the April-June period, due to a weaker yen that enhances exporters’ overseas profits when repatriated, and the belief that Japanese stocks are undervalued compared to U.S. shares, have supported the Tokyo stock market.
Kenji Abe, chief strategist at Daiwa Securities Co., noted, “Investors are increasingly expecting Japanese companies to report stronger-than-anticipated results, with some firms likely to revise their full-year earnings outlooks upward.” He also mentioned that the Nikkei is expected to rise to the upper 42,000 range as more companies are likely to upgrade projections when they release interim earnings reports.
The Tokyo stock market’s impressive performance highlights investor confidence in technology stocks and strong corporate earnings. The combination of external economic factors and internal market conditions continues to play a crucial role in shaping the market’s trajectory.
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.
