Japan’s Nikkei exceeds 40,000 points, supported by rising investor sentiment

On Monday, March 4, Japan’s Nikkei index achieved a historic milestone, surpassing 40,000 points for the first time, propelled by corporate governance reforms and robust valuations that have attracted sustained interest from global investors.

Benefiting from a surge in the technology sector, mirroring gains seen in US markets, the Nikkei climbed 0.5% to close at 40,109.23 points.

Following five consecutive weeks of gains, the Nikkei soared beyond its previous peak of 39,990.23 points set on Friday, reaching as high as 40,314.64 points before momentum tapered off in the afternoon session.

According to a Reuters poll released on February 22, some analysts anticipate further upside for Japanese stocks this year, driven by enduring shifts in corporate behavior.

While overseas investment has played a significant role in the Nikkei’s rapid ascent, there are indications that domestic retail investors, who have historically been cautious towards Japanese equities, are gradually becoming more engaged in the market.

Japanese technology stocks experienced a notable boost on Monday, propelled by the ongoing rally in shares of artificial intelligence companies, which contributed to the record-setting performance of the Standard & Poor’s 500 and Nasdaq indices on Friday.