nikkei soars to new yearly high

2025-06-27 general

tokyo, Friday, 27 June 2025.
tokyo’s nikkei average jumped for the fourth straight day. It closed at 40,150.79 yen. This marks a year-to-date high. Investor confidence grew amid easing worries. Middle east tensions and us tariff policies played a role. Blue-chip stocks experienced broad buying. Continuous stock index futures activity further boosted the market. The tokyo stock exchange (topix) also saw gains, hitting its highest level in three months. This surge signals strong positive sentiment. It also shows increased risk appetite in the japanese stock market.

Market performance

The Nikkei’s rise reflects a global trend of increasing stock prices [1]. Overseas short-term investors have increased their futures buying, aiming to profit from rising Japanese stock prices [1]. Fast Retailing, SoftBank Group (SBG), and Tokyo Electron are among the high-priced stocks with significant index contributions that have seen widespread gains [1]. At one point, the Nikkei’s increase exceeded 680 yen [1]. The tokyo stock price index (topix) also increased for the fourth consecutive day, closing at 2,840.54, a 1.28% increase, marking a three-month high since march 27 [1].

Factors driving the surge

The recovery of the Nikkei average to the 40,000 yen level is due to expectations for expanded semiconductor demand due to the spread of generative ai [7]. Since april 7, overseas investors and business corporations have been net buyers of japanese stocks [7]. Growth stocks and those tied to foreign demand have performed well [7]. Moreover, us treasury secretary betsy woodruff has requested congress not to create a new internal revenue code section 899, known as ‘retaliation tax’ [7]. The white house also hinted at extending the suspension of increased reciprocal tariffs [7].

Expert opinions and market outlook

Daiwa Securities chief technical analyst, eiji kinochi, noted that december-end dividend stocks significantly influenced the day’s movement [5]. Reinvestments related to these dividends spurred futures buying of approximately 230 billion yen, supporting the 40,000 yen recovery [5]. Ichiyoshi asset management president, mitsushige akino, suggested large-cap focused investment trusts by domestic securities firms and dividend reinvestment boosted gains, particularly in electronic components and semiconductor stocks [5]. He also believes the nikkei could reach 42,000 if us-china tariffs are extended and the us market remains strong [5].

Potential risks and adjustments

Despite the optimism, some market participants urge caution. One domestic investment firm representative noted that the current stock surge appears to be a short covering rally amid uncertainty about the us economic outlook [1]. They also cautioned about the increasing number of continued unemployment insurance claims, signaling potential deterioration in the us labor market [1]. Given the rapid increase in recent days, a short-term correction is expected [7]. However, the medium- to long-term outlook for maintaining an upward trend remains unchanged [7].

Bronnen

nikkei average stock market