Japan’s benchmark stock market index has smashed the 40,000 mark for the first time, continuing its comeback after decades of stagnation.
The Nikkei 225 gained 1 percent to 40,308.85 during morning trading on Monday, as investors took an upbeat view of Japanese firms following gains on Wall Street.
Tech shares including Tokyo Electron and Advantest were among the biggest gainers.
Japanese stocks have become some of the hottest buys over the past year as foreign investors take advantage of the cheap yen and corporate governance reforms that have boosted shareholder returns.
The Nikkei rose by more than 28 percent in 2023, beating the S&P 500 in a bumper year for the US stock market.
Last month, the benchmark index surpassed its 1989 record of 38,915.8, set as Japan’s economy was on the precipice of an asset crash that kicked off several “lost decades” of economic stagnation.
The Japanese stock market’s reviving fortunes come amid a sustained rally in US shares fuelled by excitement surrounding advances in artificial intelligence.
US tech companies have soared in value in recent months, with chipmaker Nvidia’s market capitalisation on Friday surpassing $2 trillion.
Japan’s overall economy has not matched the fortunes of its stock market, with structural challenges, including a shrinking population and rigid labour force, weighing on growth.
Japan’s economy last month officially entered recession, giving up its spot as the world’s third-largest economy to Germany.
