Japan’s Nikkei share average soared to an all-time high on Thursday, crossing the 42,000-point mark for the first time, driven by an overnight rally in U.S. stocks that boosted investor sentiment. The Nikkei ended 0.94% higher at 42,224.02, securing its third consecutive record high close this week. The benchmark index had reached a record intraday high of 42,426.77 points in early trading.
The broader Topix index also finished up 0.69% at a record high close of 2,929.17.
The surge in Japanese equities was fueled by strong performances from Wall Street’s main stock indexes on Wednesday, ahead of inflation data and quarterly earnings reports due this week. This widespread rally in U.S. stocks ignited a similar trend in Japanese shares.
Of the Nikkei’s 225 constituents, 180 shares advanced. Notably, index heavyweight and Uniqlo parent firm Fast Retailing gained 2.3%, providing the biggest lift to the index. Semiconductor-related shares followed their U.S. counterparts higher after Taiwan Semiconductor Manufacturing Co, the world’s largest contract chipmaker, reported strong quarterly revenue results. Tokyo Electron rose 0.6%, Disco Corp climbed 3.4%, and Sumco jumped 5.9% to become the largest gainer by percentage on the Nikkei.
AI-focused startup investor SoftBank Group was up 0.8%, while other tech shares also moved higher, including Sony Group and Fanuc, which rose 3.6% and 1.4%, respectively.
Japanese equities have been climbing to all-time highs over the past two weeks. Analysts attribute this trend to further yen depreciation and more perceived certainty in the market regarding the outcome of this year’s U.S. presidential election. They expect Japanese shares to gain further momentum as companies report earnings this month.
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The Nikkei has risen 25% so far this year, marking a robust performance in the Japanese stock market since the Yen tumble earlier this year.
