Japan’s Nikkei 225 index surged to a historic close of 40,913.65 on Thursday, leading gains across most Asian markets.
While Chinese markets saw declines, U.S. futures showed modest gains.
Investor optimism persists regarding potential rate cuts by the Federal Reserve, which has maintained two-decade highs to temper growth and inflation. Recent data indicating easing price pressures has fueled hopes for policy adjustments.
The Nikkei 225 climbed 0.8% to its record high, driven by strong performances in automakers and export-oriented stocks.
Toyota Motor Corp. rose 2%, Honda Motor Co. gained 3%, Nissan Motor Corp. rallied 4.5%, and Advantest Corp., a computer testing equipment maker, saw a 2.1% increase.
During intraday trading, the Nikkei 225 reached a peak of 41,087.75 on March 22, surpassing its previous record close of 40,888.43, also set on the same day.
Investors have been drawn to the Japanese market in part due to the yen trading at 34-year lows against the dollar, enhancing profitability for exporters when earnings are repatriated.
Changes in investment account regulations have further bolstered share purchases.
The Nikkei 225 has surged 22.4% year-to-date. The index experienced a similar ascent in the late 1980s during Japan’s bubble economy, before crashing when the financial bubble burst in early 1990 after hitting its previous record of 38,915.87.
Elsewhere in Asia, Hong Kong’s Hang Seng recovered from early losses to rise 0.2% to 18,018.72, while China’s Shanghai Composite index declined 0.8% to 2,957.57.
Taiwan’s Taiex jumped 1.5%, propelled by a 2.7% gain in chipmaker Taiwan Semiconductor Manufacturing Corp.
Australia’s S&P/ASX 200 surged 1.2% to 7,831.80, and South Korea’s Kospi advanced 1.1% to 2,824.94. Bangkok’s SET also saw a 0.9% increase.
In the U.S., markets extended gains in a shortened session ahead of the Independence Day holiday. The S&P 500 set a new all-time high for the second consecutive day, closing at 5,537.02 with a 0.5% increase.
Tesla’s shares rose 6.5% following better-than-expected spring sales figures, contributing to the market’s upward momentum along with Nvidia, which gained 4.6% and has seen a 159% increase in its stock value this year.
Bond market activity intensified, with Treasury yields falling after weaker-than-expected reports on the job market and U.S. services sector.
Anticipation builds ahead of Friday’s comprehensive employment report from the U.S. government, which will provide insights into June’s payroll additions.
The 10-year Treasury yield dropped to 4.35%, down from 4.44%, reflecting market expectations of easing inflation prompting potential Federal Reserve interest rate adjustments.
In commodities trading, U.S. benchmark crude oil fell 73 cents to $83.15 per barrel on the New York Mercantile Exchange, while Brent crude, the international standard, declined 67 cents to $86.67 per barrel.
The U.S. dollar weakened to 161.44 Japanese yen amid expectations of rate cuts narrowing the interest rate differential with Japan, where the benchmark lending rate remains near zero.
