nikkei soars: can overseas funds keep the rally alive?

2025-08-12 general

tokyo, Tuesday, 12 August 2025.
tokyo’s stock exchange is hitting new heights. the nikkei average temporarily exceeded its all-time high today, reaching levels unseen since july 2024. this surge is largely due to substantial buying from overseas short-term funds. the index jumped over 1100 yen. analysts are cautiously optimistic. the rally’s strength defies traditional economic indicators. the weaker yen and easing us tariff concerns boosted investor risk appetite. contrarian individual investors are joining the buying frenzy. but can this momentum last?

market performance

The tokyo stock exchange’s prime market saw active trading. The estimated turnover reached ¥3.8862 trillion with 1.6441 billion shares changing hands [1]. Softbank group, fast retailing, kddi, and konami group experienced gains [1]. Olympus, toppan, nintendo, and nitori holdings faced selling pressure [1]. The nikkei average’s morning close stood at 42,849.67 yen, a rise of 1029.19 yen from the previous session [5]. The topix index also increased by 43.75 points to reach 3067.96 [5].

factors driving the surge

Easing concerns over us tariff policies are a key factor. President trump’s administration is reportedly fine-tuning measures to reduce the burden of mutual tariffs [6]. This development has lessened investor apprehension. The yen’s depreciation against the dollar also contributed to the market’s upward momentum [3]. A weaker yen typically benefits export-oriented companies, boosting their earnings potential. The nikkei’s rise surpassed the intraday high of 42,426 yen set on the same day it previously hit a record [3].

expert opinions

Market experts are weighing in on the nikkei’s trajectory. kurose koichi, chief strategist at resona asset management, believes the nikkei could reach 43,000 yen [2]. He attributes the market’s strength to overseas short-term funds engaging in stock index futures trading, irrespective of fundamental economic conditions [2]. However, one market participant noted the surge is not explainable by corporate earnings or the domestic economy [1]. This participant also pointed out the absence of strong sellers, with even contrarian individual investors refraining from selling [1].

analyst perspectives on future

Nomura asset management’s chief strategist, hideyuki ishiguro, suggests that japanese stocks are becoming more attractive due to resolved tariff negotiations [6]. He highlights a shift in focus towards undervalued japanese equities by overseas investors [6]. Smbc trust bank’s chief market analyst, masahiro yamaguchi, notes that japanese corporate earnings have been reasonably positive [6]. He anticipates investors’ attention will now shift towards us economic trends and monetary policy [6]. The tokyo stock exchange is experiencing a wave of optimism, fueled by international factors and renewed investor confidence [3][6].

individual stock movements

Specific stocks are reflecting the broader market trends. Mitsui mining & smelting surged, hitting a year-to-date high, climbing ¥979, or 12.761, 14.62%, to ¥7672 [4]. This increase followed an upward revision of its consolidated net profit forecast for the fiscal year ending march 2026 [4]. Conversely, analysts at powertrend suggest that if the high of july 24th at ¥42,065 is a concern, the market could decline below this level [7]. They also note that a bearish ‘engulfing line’ pattern could emerge if today’s high becomes a swing high, potentially leading to a decline below ¥41,283 [7].

Bronnen

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