The Nikkei charged to a 34-year peak at 38,865.06 points, with its all-time high of 38,957.44 points hit on Dec. 29, 1989 in range. Asia’s darling stock market is up 15% for the year thus far, extending its 28% rally of 2023.
The surge has come even as Japan slipped into recession and lost its title as the world’s third-largest economy to Germany, and as a sliding yen is back on traders’ radars.
To be sure, a weak yen is typically good for the stock market, given it boosts profits of large Japanese companies with global operations which in turn helps the export-reliant economy.
But on the flip side, a soft yen raises the prices of food and energy imports, hurting consumers whose pay cheques are barely keeping up.
That’s all the more a headache for the Bank of Japan (BOJ), which is walking a tightrope between ending years of negative interest rates and keeping monetary policy accommodative.
BOJ Governor Kazuo Ueda said on Friday the central bank will examine whether to maintain its various monetary easing measures when sustained achievement of its inflation target comes into sight.
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