Asian Stocks Surge as Japan’s Nikkei Approaches All-Time High,Insights & Analysis

Asian Stocks Surge as Japan’s Nikkei Approaches All-Time High,Insights & Analysis

Asian Stocks Rise as Japan’s Nikkei Nears Record High 

On Friday , Stocks in Asia went up. The Nikkei 225 index in Tokyo, Japan, is close to reaching its highest point ever, almost 35 years after it reached its peak and then went down because of Japan’s financial bubble bursting. Even though Japan slips into recession and loses its spot as the world’s third largest economy. Germany overtakes Japan as third biggest economy.

Asian Stocks Surge as Japan's Nikkei Approaches All-Time High,Insights & Analysis

In the U.S., futures were lower after stocks on Wall Street reached a new high, even though there were some mixed reports about the economy. Growth rate will be low , interest rates will be high and unemployment rises.

Japan’s Nikkei 225 ended 0.9% higher, at 38,487.24. It has been very close to its highest point ever, 38,915.87, which it reached on Dec. 29, 1989, just before share and property prices dropped dramatically. It traded at its highest point of 38,865.06 on Friday.

Despite signs that the Japanese economy is not doing great, like falling into a recession at the end of 2023, and government reported the economy shranks at annual rate 0.4% in October to December , stock prices in Japan keep going up. Efforts to make the economy grow more have not been very successful because private investment and spending by consumers are weak. 

Changes to the rules about tax-free investment accounts have helped boost Japanese stock prices. Also, a weak yen has made stocks more attractive to buyers, and some investors are moving their money out of Chinese markets and China’s economy in 2023 is bumpy as China’s economy suffering from long COVID. China’s housing and credit market bubble has burst.

In other parts of Asia, the Hang Seng index in Hong Kong went up by 2.5% to 16,340.85, and the Kospi in Seoul increased by 1.3% to 2,647.94. South Korea is a highly technology  , industrialized  , $1.6 trillion economy and its freedom score is 73.7 making its economy the 15th in the 2023 index.

Australia’s S&P/ASX 200 rose by 0.7% to 7,658.30 and and its gross domestic product is likely expanded 1.5% in 2023. The SET in Bangkok stayed about the same, and the Sensex in India went up by 0.5%. 

The Taiex in Taiwan dropped by 0.2% after reaching a record high of 18,644.57 the day before and Taiwan’s private consumption has been resilient , growing 8.9% YoY in Q32023 . The world’s largest computer chip maker, TSMC, saw a big increase in its stock price, almost 8%, after analysts raised their recommendations for Nvidia, TSMC’s main chip buyer, because of expected growth in artificial intelligence. 

On Thursday, the S&P 500 went up by 0.6% to 5,029.73, just barely higher than its highest point set last week. The Dow Jones Industrial Average increased by 0.9% to 38,773.12, and the Nasdaq composite rose by 0.3% to 15,906.17. 

In 2023 , U.S. GDP rose 2.5% more than any other G7 economy according to the International Monetary Fund. There were different reports about the economy. One showed that sales at U.S. stores dropped more in January compared to December than expected . This was a big decrease in spending by American families, whose spending has helped the economy, even with high interest rates. But this drop could help lower inflation. Another report said fewer Americans applied for unemployment benefits last week than expected, showing that there are still many jobs available and S&P 500 is up over 53% since January.

Overall, these reports made Treasury yields go down in the bond market. The yield on the 10-year Treasury went down to 4.24% from 4.27% on Wednesday. 

Since 2001 , The Federal Reserve has already raised its main interest rate to the highest level. The hope is that these high rates will help lower inflation without causing a recession it is expected that Global inflation to fall from 8.8 % in 2022 to 6.6% in 2023 and 4.3% in 2024 , still above pre pandemic levels of about 3.5% . CBRE Group’s stock went up by 8.5% and made profit in the last three months of 2023. Even though commercial real estate is facing challenges, the company also had stronger revenue than expected.

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