MicroStockHub
Japan's benchmark Nikkei 225 index (NKY:IND) topped 40,000 points for the first time ever on Monday, notching yet another record close as upbeat investor sentiment continues to fuel its historic rally.
The index, which posted two consecutive monthly gains this year, reclaimed its 1989 peak in February amid growing foreign investor interest, a corporate governance makeover, and a weaker yen boosting exporter stocks.
Nikkei 225 (NKY:IND) climbed 1% to as high as 40,314.64 points on Monday, before paring gains to end at 40,109.23 points.
"The second-largest stock market has captured the interest of investors, supported by stronger earnings, and incentivized by Japan's fiscal and monetary policies," Jeffery Kleintop, chief global investment strategist at Charles Schwab, previously explained.
He said earnings growth remained strong despite Japan's sluggish economic growth, as many Japanese companies' sales come from abroad.
Additionally, Wall Street's semiconductor momentum lifted Japanese chip-related stocks on Monday, including Tokyo Seimitsu (+3.5%) and Tokyo Electron (+2.4%).
"The Japanese semiconductor space offers diversification opportunities for investors who want to ride on the global trend of AI and the semiconductor industry, but seek to reduce concentration in U.S. exposure," Saxo analysts noted.
Investing Group Leader Valkyrie Trading Society believes Nikkei 225 (NKY:IND) still has plenty of upside potential, and "even with the new highs, Japan remains undervalued."