In a remarkable turn of events, Japan’s benchmark Nikkei 225 index soared to a record close of 40,913.65 on Thursday. This historic surge was indicative of a broader trend, as many major global markets also experienced gains. Notably, futures for the S&P 500 edged up by 0.1%, while the Dow Jones Industrial Average futures saw a modest rise of 0.2%. The Nikkei 225 itself leaped by 0.8% to its record-breaking close, inching close to its all-time high during intraday trading, which stands at 41,087.
A significant contributor to this bullish sentiment in Japan was the impressive performance of major automakers. Shares of Toyota Motor Corp. jumped by 2%, Honda Motor Co. climbed 3%, and Nissan Motor Corp. experienced a robust rally of 4.5%. Moreover, Advantest Corp., a prominent player in the computer testing equipment sector, saw its shares surge by 2.1%. Investors have been flocking to the Japanese market, partly due to the depreciating yen, which is trading at 34-year lows against the dollar. A weaker yen typically boosts the profits of exporters when their earnings are repatriated, making Japanese stocks more attractive. Consequently, the Nikkei 225 index has gained an impressive 22.4% so far this year.
The positive trend was not confined to Japan alone. Taiwan’s Taiex index experienced a notable jump of 1.5%, bolstered by a 2.7% gain in shares of Taiwan Semiconductor Manufacturing Corp., a heavyweight in the chip-making industry. Over in Australia, the S&P/ASX 200 surged by 1.2% to a close of 7,831.80, while South Korea’s Kospi advanced by 1.1%, reaching 2,824.94. Even Bangkok’s SET index enjoyed a modest rise of 0.5%, reflecting a day of optimism across the Asia-Pacific region.
The upbeat mood in Asian markets followed Wednesday’s performance in the U.S., where stocks continued to rise in a holiday-shortened session. This uptick came amid weak economic reports that have left the door open for potential interest rate cuts. With U.S. markets closed on Thursday for the Independence Day holiday, investors seem to be contemplating the implications of future monetary policy adjustments.
Meanwhile, in early trading on Thursday, U.S. benchmark crude oil prices saw a decline, with a 41-cent drop bringing the price to $83.47 per barrel on the New York Mercantile Exchange. Additionally, the U.S. dollar weakened against the Japanese yen, falling to 161.23 yen from 161.67 yen. This shift reflects expectations that potential interest rate cuts in the U.S. might narrow the gap with Japan, where the benchmark lending rate remains near zero.
Overall, it was a day marked by significant gains for major markets and a historic milestone for Japan’s Nikkei 225. Investors around the world are keenly watching the movements in both equities and currencies as they navigate a landscape shaped by fluctuating economic indicators and shifting monetary policies.
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