Nikkei tops 40,000 for first time
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The news: Japan's Nikkei 225 Stock Average rose above 40,000 for the first time amid a historic rally on the Tokyo Stock Exchange (TSE).
The numbers: The Nikkei, a price-weighted index comprised of the 225 blue chip companies traded on the TSE, broke a new intraday record as it climbed 0.9% to 40,258.41 early on Monday.
There were also gains on the Topix, a broader market-cap based index, which remained around 6% below its high from more than 30 years ago.
The context: The Nikkei broke its 1989 peak last month, as improved shareholder returns, the weaker yen and higher corporate profits lifted the market. Tech shares — including chipmaking gear producer Tokyo Electron — have driven gains in recent months, while Warren Buffett's endorsement of Japanese trading houses boosted investor confidence last year.
Both the Nikkei and the Topix have benefited from improved global sentiment too, with expectations of an interest rates cut by the US Federal Reserve in June, and a slowdown in China prompting funds to switch into Japan, Bloomberg reported.
Foreign investors remained bullish on Japanese stocks as large asset managers BlackRock and Amundi Asset Management expected earnings growth and changes in corporate governance would keep the strength going.
The source: Bloomberg
