Japan’s Nikkei share average surged to its highest level since August 1990 on Friday, driven by a confluence of positive factors from strong earnings to optimism over a U.S. debt ceiling deal. The benchmark index jumped as high as 30,924.57 shortly after the open, on course for a seventh straight winning session.
The broader Topix extended its climb to as high as 2,171.37, smashing through the post-bubble milestone on Tuesday. The Nikkei’s rally has been powered by a string of strong corporate results, a weaker yen, an economy that is starting to show signs of a post-COVID consumption revival, foreign buying, and a push for better corporate governance by the Tokyo Stock Exchange.
The Nikkei’s final push to a 33-year peak drew additional momentum from gains in global stocks, as investors turned more optimistic that U.S. lawmakers can soon reach a deal to raise the debt ceiling and avert a potentially catastrophic default.
Chip-related shares had a volatile session, with chip-testing equipment maker Advantest climbing 3.35% at the open to hit a new record high, before erasing those gains and turning sharply lower. Ricoh led Nikkei gainers with a 6.65% jump after announcing it was considering joining forces with a Toshiba unit to develop and manufacture copiers and printers.
Overall, services led with a 1.46% rise, followed by precision machinery and machinery with gains of about 1% each. Investors are now considering whether the Nikkei rally will continue, with the word ‘overheated’ being front of mind.