Japan’s stock market keeps ripping higher.
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The country’s benchmark Nikkei 225 index rose above the 45,000 mark for the very first time on Sept. 16 as Japan continues to lead equity markets throughout Asia. Japanese stocks powered higher after U.S. President Donald Trump indicated that U.S.-China trade negotiations underway in Spain are progressing. The Nikkei 225 closed up 0.3% on the day at 44,902.27 after rising as high as 45,055.38.
Japan’s other major market, the Topix, gained 0.25% to finish trading at 3,168.36 after also crossing an all-time high. Japan’s equity markets have been driven higher by gains in leading stocks such as Toyota Motor Corp. (TM), Hitachi (HTHIY), and Nintendo (NTDOY). The stock of Nintendo alone is up 60% on the year.
Reversal of Fortune
For Japan, the current bull market represents a major reversal of fortune for the country’s equity markets, which last hit all-time highs in 1989. Until the past year, the benchmark Nikkei 225 stock index had been mired in a 35-year slump.
But now, the Japanese market is rising as investors look outside the U.S. for opportunities and on expectations for interest rate cuts from the U.S. Federal Reserve. The rise in Japanese stocks has also been broad-based, with technology, energy, and utility stocks all gaining ground. Until this year, equity market performance in Asia had been dominated by Hong Kong’s Hang Seng index and China’s CSI 300 index.
Is TM Stock a Buy?
Let’s look at the three-month performance of Toyota, a leading Japanese stock. As one can see in the chart below, TM shares have risen 13% over the last 12 weeks.
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