Pedestrians
walking
across
with
crowded
traffic
at
Shibuya
crossing
square.
Jaczhou
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Japan’s
Nikkei
225
hit
a
record
high
on
Thursday
as
robust
corporate
profitability
and
steps
aimed
at
boosting
investor
returns
fuel
a
blistering
rally
in
Japanese
equities
this
year.
The
Nikkei
225
hit
38,924.88,
surpassing
the
previous
record
high
of
38,915.87
reached
in
1989.
Both
the
Nikkei
and
the
broader
Topix
have
been
standout
outperformers
in
the
Asia
Pacific,
up
more
than
10%
so
far
this
year
after
surging
more
than
25%
in
2023
—
their
respective
best
annual
gains
in
at
least
a
decade.
Japan
Inc’s
solid
third-quarter
corporate
earnings
have
prompted
Bank
of
America
equity
strategists
to
upgrade
their
2024
year-end
forecasts
for
the
Nikkei
225
to
41,000
from
38,500.
They
raised
their
forecasts
for
the
Topix
to
2,850
from
2,715.
The
rally
has
also
been
supported
by
a
weaker
yen,
which
has
shed
about
6%
against
the
dollar
so
far
this
year
and
seems
on
track
to
drop
to
to
33-year
lows
touched
late
last
year.
Nikkei
since
December
1989
Investors
have
been
pouring
funds
into
Japanese
equities,
taking
the
lead
of
Warren
Buffet’s
bullish
calls
on
Japan
and
cheering
the
Japanese
government’s
push
towards
greater
corporate
governance
reforms
—
with
the
aim
of
compelling
Japan
Inc
to
boost
shareholder
returns.
Data
from
the
Tokyo
Stock
Exchange
showed
foreigners
invested
more
than
2
trillion
yen
in
the
exchange’s
“prime”
offerings
—
its
largest
and
most
liquid
stocks
—
in
January.
watch
now
Nikkei
reported
last
week
net
profits
of
listed
companies
in
Japan
for
the
fiscal
year
ending
March
2024
could
reach
a
record
high
for
the
third
consecutive
year.
This
comes
on
the
back
of
record
quarterly
earnings
for
the
October-December
period,
which
have
increased
45%
from
the
same
period
a
year
earlier
and
are
14%
higher
than
consensus
estimates,
according
to
Goldman
Sachs
analysts.
Toyota,
the
world’s
largest
car
manufacturer,
was
among
several
Japanese
companies
to
upgrade
its
earnings
forecast,
which
includes
a
bigger
profit
margin
and
stronger
revenue.
Weak
yen,
strong
stocks
Recent
gains
in
the
stock
markets
have
come
against
the
backdrop
of
a
weakening
Japanese
yen,
last
at
150.40
against
the
dollar,
driven
largely
by
the
divergence
between
between
high
U.S.
interest
rates
and
Japan’s
ultra
easy
policy.
Japanese
Finance
Minister
Shunichi
Suzuki
was
the
latest
in
a
string
of
several
government
officials
to
articulate
his
concern
on
the
weakening
yen
on
Friday
and
reportedly
said
he
was
watching
the
currency’s
moves
with
a
sense
of
“urgency.”
Japanese
yen/U.S.
dollar
While
the
yen’s
chronic
weakness
has
boosted
some
of
Japan’s
exporters,
it
has
diminished
the
purchasing
power
of
consumers
in
Japan.
Yet
the
Bank
of
Japan
has
maintained
the
world’s
last
negative
rates
regime
despite
“core
core
inflation”
—
which
excludes
food
and
energy
prices
—
exceeding
its
2%
target
for
more
than
a
year.
Market
participants
expect
the
BOJ
to
move
away
from
its
negative
rates
regime
at
its
April
policy
meeting,
once
the
annual
spring
wage
negotiations
confirm
a
trend
of
meaningful
wage
increases.
The
central
bank
believes
wage
increments
would
translate
into
a
more
meaningful spiral,
encouraging
consumers
to
spend.
But
prolonged
high
inflation
rates
have
hit
domestic
consumption
—
a
key
reason
why
Japan’s
GDP
shrank
for
a
second
consecutive
quarter,
confounding
analysts
that
had
expected
a
small
expansion
in
Japan’s
economy.
It
also
meant
that
Japan
ceded
its
place
as
the
world’s
third-largest
economy
to
Germany.
