Japan's Nikkei 225 Surpasses 50,000 for the First Time in History

[Financial News Tokyo=Correspondent Seo Hye-jin] Japan's leading stock index, the Nikkei 225, surpassed the 50,000 mark during trading on the 27th for the first time ever. The rally was driven by optimism over easing U.S.-China trade tensions and expectations for new policies from Japan's newly formed cabinet, which has seen a rise in approval ratings.
As of 11:30 a.m. that day, the Nikkei 225 was up 2.08% from the previous session, trading at 50,322.75. At one point, it soared as high as 50,379.
This marks the first time in history that the index has broken through the 50,000 barrier.
Nihon Keizai Shimbun (The Nikkei) analyzed that reduced concerns over U.S.-China trade friction and growing expectations for the Takaichi Cabinet's policies were key factors behind the surge.
Scott Bessent, United States Secretary of the Treasury, said on the 26th (local time) that with China temporarily lifting its export controls on rare earth elements (REE), the U.S. is unlikely to impose an additional 100% tariff on Chinese goods.
The Takaichi Cabinet's stable approval ratings have also fueled optimism for economic policies, further boosting stock prices.
A joint poll by The Nikkei and TV Tokyo Corporation conducted from the 24th to the 27th showed the Takaichi Cabinet's approval rating at 74%. This is the second-highest level since the survey began in 2002 using the current methodology.
Hideyuki Ishiguro, chief strategist at Nomura Asset Management, noted, "With strong public support, the accuracy of policy implementation is improving."
Stocks related to defense, shipbuilding, artificial intelligence (AI), and semiconductors—seen as beneficiaries of the Takaichi Cabinet—are also on the rise.
The United States Consumer Price Index (CPI) released last weekend came in below market expectations, and hopes that the Federal Reserve Board (FRB) will decide to cut interest rates have contributed to the market's upward momentum.
Ichiyuki Muramatsu, head of asset management at Nihon Capital, explained, "During the U.S. government shutdown, the few available economic indicators provided reassurance to the market."
This week, a U.S.-Japan summit (28th), a Bank of Japan (BOJ) monetary policy meeting (29th–30th), and major corporate earnings announcements are all scheduled.
Makov Ide, chief strategist at NLI Research Institute (NLI), commented, "If growth expectations wane following corporate earnings releases, there is a risk of a market correction."
sjmary@fnnews.com Seo Hye-jin Reporter