Japan’s Nikkei 225 Index continued to hit multi-year record breaking, briefly crossing the 36,000 mark on Monday but closed slightly lower at 35,901.79 with a gain of 0.91%. Meanwhile, TOPIX (Tokyo Price Index), which tracks Japan’s largest firms by market capitalization, also reached new highs with a gain of 1.22% to close at 2,524.6.
Nikkei 225 recorded an impressive 6.34% increase last week as investors were back on speculation on a potential shift in policy rates that could finally bring interest rates in Japan to a positive territory.
The Organisation for Economic Cooperation and Development (OECD) last week urged the Bank of Japan (BOJ) to gradually raise short-term rates from early 2024 if inflation rates in the country stay around its 2% target, amid accelerating wage growth and the output gap closing.
BOJ Governor Kazuo Ueda stressed that the central bank’s decision is to keep the ultra-loose policy rate at this level until the country can sustainably achieve its 2% inflation target from continuous wage rises.
Nikkei 225 is now hovering around its 34-year high for the first time since February 1990.
