First modification:
The Nikkei 225 surpassed its own record reached in 1989 and this Thursday, February 22, it closed at 39,098.68 points with an increase of 2.2%. The previous all-time mark of 38,915.87 was reached 35 years ago, before the financial bubble burst in the Asian country, ushering in an era of growth. From the Tokyo stock exchange they celebrated the milestone and the stock markets of neighboring countries were infected by Japanese enthusiasm.
Euphoria took over the stock market of the Japanese capital and between applause and shouts of happiness, the operators celebrated the historic event that reflected the solid foreign investment and the good performance of the companies of the fourth largest economy in the world.
I am very happy that the stock market is going up because “Investors are confident that Japan is overcoming deflation and that corporate performance is improving.”Kentaro Okuda, the CEO of the Nomura Holdings group, told the local press after breaking the record.
Precisely there, in the holding company of Nomura stockbrokers in Tokyo, around 20 traders stood up to applaud the event, at a time when they also celebrated that foreign investors had injected nearly 42 billion dollars into the stock market last year, while the Japanese yen remains weak against the dollar.
A panorama that contrasts with the resilience of the market where strong gains have been recorded in recent months, helped by the strength of foreign investors, who account for most of the trading volume on the Tokyo stock exchange.
And share prices in Tokyo have risen 15% in the last three months and around 44% in the last year according to official figures.
Meanwhile, in Chinese territory, in Shanghai, prices have fallen more than 11% compared to a year ago, and the Hang Seng index of the semi-autonomous territory of Hong Kong has fallen around 22%.
“What just happened is a good thing for Japan, but the situation is different from the bubble era in the past. Right now, due to the weakness of the yen, I think the money is coming from foreign investors who want invest in Japan,” a 70-year-old retired executive told the AP news agency anonymously.
The financial bubble
After the peak that the Nikkei reached on December 29, 1989, banks canceled some 100 billion yen in debts that were impossible to collect and The shares remained well below the record point for several years, even falling below 8,200 points in 2011 preceded by three natural disasters: a powerful earthquake, a tsunami and meltdowns at the Fukushima Dai-Ichi nuclear power plant in the northeast of the country.
Looking at the current scenario, a phenomenon is occurring in the country that is unlike what is happening in the main global economies.
While in the United States the gains are supported by a market anxious for the Federal Reserve to cut interest rates as inflation subsides, in Japan the reference rate has been at levels below 0.1% for more than ten years.
Russia leaves and Brazil enters: this is the new ranking of the ten largest economies in the world
Added to this situation is the fact that the country would have fallen into a technical recession at the end of 2023 and would have been ousted by Germany in the global ranking of the International Monetary Fund (IMF), as well as China's weak trade scenario with respect to its global exports and the deflation that it has had to go through in recent months.
With AP and local media.
#Economy #Japan #celebrates #stock #market #record #years