The Nikkei average closed at 332.89 points on Thursday, while the Topix index rose 26.29 points to surpass its all-time high of 35 years ago in 1989, as the U.S. dollar fell to the low 161 yen range this week. File Photo by Keizo Mori/UPI
Financial experts say despite perceived economic problems in Japan, the government is “much more focused and much more aggressive in tackling the issues” than seen in the past 40 years. File Photo: Mori Keizo/UPI
July 4th (UPI) — Amid a continued weakening yen, Japan’s two stock indexes closed at all-time highs on Thursday, surpassing their previous record highs in March, as the US dollar fell in Japan.
The 225-stock Nikkei average closed up 332.89 points on Thursday, up from 40,913.65 points on Wednesday, while the Topix closed 26.29 points above its peak recorded 35 years ago in December 1989, as the value of the U.S. dollar in Japan fell to the low 161 yen range this week.
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This surpassed the high recorded in March when Japan’s Nikkei stock average topped 40,000 for the first time, hitting a record high of 40,314.64 during trading before closing at a record high of 40,109.23.
US markets were closed for Independence Day.
Meanwhile, Japan’s Finance Ministry acknowledged in May that it had spent trillions of yen to stem the yen’s rapid depreciation against the U.S. dollar.
“The lack of intervention from Japan’s Ministry of Finance has reassured the market,” Shingo Ide, chief equity strategist at Nikko Research Institute, told Japan Today on Thursday. “This is being interpreted as the authorities being tolerant of an exchange rate of around 160 yen to the dollar.”
This was followed up last month in June when the Japanese yen fell below 160 yen to the US dollar, its lowest level in more than 37 years, sending Tokyo scrambling to implement appropriate intervention measures.
Ide added that rising long-term interest rates in Japan are making stocks and bank profits more attractive to investors, supporting the Japanese market.
Financial experts say despite perceived economic problems in Japan, the government is “much more focused and much more aggressive in addressing the issues” than seen in nearly four decades.
“I think we’re going to see an explosion of opportunity in the venture capital space,” Ed Rogers, executive director at Rogers Investment Advisors, told CNBC on Wednesday.
Rogers argues that for many years the prevailing logic was that foreign companies needed to be based in China to do business in Asia, but that this has changed in recent decades.
The announcement comes the same day that the Pentagon said on Wednesday it would deploy dozens of state-of-the-art fighter jets to multiple bases in Japan as part of a modernization plan amid rising tensions with China, North Korea and Russia.
Citing the strengthening of diplomatic and military ties between the United States and Japan in recent years and the Indo-Pacific region, Rogers said, “Japan will find itself in a different geopolitical situation in 2022 and beyond.”
