©Reuters. FILE PHOTO: A visitor stands next to an electronic screen displaying a scoreboard of Japan’s Nikkei stock prices as the average rose above an all-time record in December 1989, inside a building in Tokyo, Japan, on February 22, 2024. REUTERS/Isse
2/2
By Brigid Riley
TOKYO (Reuters) – Japan’s main stock benchmark surpassed the 40,000 level for the first time on Monday, continuing a rapid rise to new highs this year, spurred by corporate governance reform and cheap valuations.
As technology stocks jumped, trailing their U.S. counterparts, the stock average rose 0.79% to 40,226.83 at midday close, breaking through an intraday high of 39,990.23 reached on Friday.
Overseas investors appear to be driving the buying, and many appear to be investing from a medium- to long-term perspective, said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui (NYSE:) DS Asset Management.
“I think the market will continue to grow,” he said.
Japanese tech stocks were supported by the ongoing AI rally in US stocks that saw the Nasdaq and Nasdaq hit record highs on Friday.
Chip test equipment maker Advantest, which counts U.S. artificial intelligence company Nvidia (NASDAQ:) among its customers, gained 3.9%. Chipmaking equipment giant Tokyo Electron gained 2.7%.
Shares of these two companies added a total of 175 index points to the Nikkei’s 316-point rise during the morning session.
Shin-Etsu Chemical, which makes silicon semiconductor products, rose 2.2%.
JSR Corp, a major maker of photoresists used in chip production, jumped 4.4% after media reported that state fund Japan Investment Corp (JIC) plans to launch a public offering for the shares this month.
The broader rose 0.16% to 2,713.79.
Among the 33 industrial sectors on the Tokyo Stock Exchange, electrical machinery was the third with the highest gains, up 1.2%, after pulp and paper companies, up 2.1%, and mining up 1.3%.