The 225-issue Nikkei average has hit a record high after stocks surged on Thursday, buoyed by continued enthusiasm from overseas investors.
By close of trading, the Nikkei had remained buoyant, soaring to 39,098.68 and surpassing both the previous all-time high of 38,957.44 and the former record closing price of 38,915.87, both marked in December 1989.
Last Friday, the benchmark surpassed the 38,800 mark, approaching the 1989 record that was set during the economic boom of the bubble era. It eventually closed at 38,487.24 — up some 329.30 points from the previous day.
The Nikkei index has performed strongly this year — driven up in part by the weakness of the yen against the U.S. dollar. While the depreciation of the yen has minimized Japan’s overseas spending power, it has proved advantageous for overseas investors. This has also coincided with Japanese officials emphasizing corporate governance reforms that have helped boost the market’s allure.
While Japan’s markets performed strongly last week, the yen’s weakening against the dollar saw the country lose its crown as world’s No. 3 economy in dollar terms, according to the IMF. The country’s gross domestic product also contracted for the second consecutive quarter, meaning it had entered a “technical recession” — though experts said the Japanese economy’s fundamentals remain strong.