Japan’s benchmark Nikkei 225 index has closed at a record high for the first time since 1989 as stocks in the country continue to power upwards.
The Nikkei closed at 39,098.68, surpassing its previous record of 38,915.87 reached 35 years ago.
Strong corporate earnings and steps aimed at boosting investor returns have fueled a rally in Japanese stocks over the past year.
The Nikkei has been the top performing stock index in Asia, up more than 10% in 2024 after surging 25% in 2023. The index produced its best annual gain in at least a decade.
Stocks in Japan have been rising sharply on the back of record quarterly earnings for the fourth quarter of 2023, which have increased 45% from the same period a year earlier and are 14% higher than consensus estimates, on average, according to data from Goldman Sachs (GS).
The rally in Japanese equities has also been supported by a weaker yen currency, which has declined 6% against the U.S. dollar so far this year and is on track to drop to a 33-year low.
Foreign investors, including Warren Buffett, have been pouring capital into Japanese stocks in recent years.
Data from the Tokyo Stock Exchange shows that foreigners invested more than 2 trillion yen ($13.31 billion U.S.) in Japanese stocks this January alone.
Analysts at Bank of America (BAC) recently raised their year-end forecast for the Nikkei 225 to 41,000 from 38,500.
