Nikkei hits record high as Japanese stock rally continues | NHK WORLD-JAPAN News

Japan’s stock market is continuing its impressive rally. The Nikkei 225 broke new ground on Thursday, closing above 42,000 for the first time in history.

It was a day of strong gains across a wide range of stocks. The Nikkei surged by more than 500 points, reaching an all-time high of over 42,400 during trading.

The rally was fueled by a robust performance in the US market and a significant influx of foreign investment. In recent weeks, the Nikkei has gained more than 3,600 points.

According to the Tokyo Stock Exchange, foreign buyers poured a net 180 billion yen or about 1.1 billion dollars into Japanese stocks last week. This marks their second straight week of net buying.

An economist says foreign investors are betting on the growth potential of Japanese businesses.

Nomura Securities’ strategist Sawada Maki said: “Foreign investors are anticipating earnings growth and more corporate reform in Japanese companies. But some buyers may be premature in their expectations.”

One standout performer is Fast Retailing, the company behind clothing brand Uniqlo. It has posted record sales and profits for the nine months through May.

This is a result of strong sales in Europe and the US, as well as increased spending by foreign tourists in Japan.

Fast Retailing CFO Okazaki Takeshi said, “I hope that the rise in stock prices will improve people’s outlook on the economy and raise consumer demand.”

The question now is whether this rally can continue. The Nomura Securities economist says the upcoming earnings season, starting later this month, will be crucial.

She says further gains will depend on companies raising their earnings forecasts.