Nikkei 225 stock index enjoyed its best day in over a year on Tuesday, February 13th, 2024, soaring 3% to close at 37,963.97. This impressive rally was fueled by two key factors: strong earnings reports from leading tech companies and a weakening Japanese yen.
Tech Sector Leads the Charge:
The tech sector emerged as the star performer, with Tokyo Electron setting the pace. The chipmaking giant boosted its full-year revenue and profit guidance, sending its shares soaring 13% to a record high. This positive sentiment spilled over to other tech companies, including SoftBank, which climbed on the back of strong performance from its subsidiary Arm.
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Yen Weakness Bolsters Exporters:
Adding further momentum to the rally was a weaker yen. The Japanese currency depreciated against the US dollar, making exports more competitive and boosting the profits of export-oriented companies. This was particularly beneficial for automakers like Toyota, which contributed significantly to the Topix index gain.
Conclusion:
Nikkei 225 just 2.5% from its record high, but analysts warn against overconfidence. The US inflation report might cause market volatility, while geopolitical concerns persist. The present rise suggests additional expansion in the Japanese stock market, particularly in tech.
Muzzammil is a content writer at Stock Target Advisor. He has been writing stock news and analysis at Stock Target Advisor since 2023 and has worked in the financial domain in various roles since 2020. He has previously worked on an equity research firm that analyzed companies listed on the stock markets in the U.S. and Canada and performed fundamental and qualitative analyses of management strength, business strategy, and product/services forecast as indicated by major brokers covering the stock.
