Moomoo News Global

On the 21st, the Tokyo stock market experienced a notable extension of its upward trend, with the Nikkei Stock Average reaching a new all-time high during the session. This surge in buying momentum was encouraged by the Federal Open Market Committee's (FOMC) decision to stick with its earlier projection of implementing three rate cuts in 2024.

The Bank of Japan's continued easing policy, even after the removal of negative interest rates, has contributed to a depreciation of the yen, benefiting export-driven sectors, particularly the automotive industry, along with semiconductor and financial sectors, including insurance and banking, all of which have seen their values rise.

However, the stock market's momentum faced temporary hurdles as the yen's decline halted following remarks by BOJ Governor Kazuo Ueda, who indicated in a parliamentary statement that the expected inflation rate is on a path towards reaching 2%, impacting the pace of gains in the stock index.

The depreciation of the yen to the 151 level has spurred interest in export-oriented stocks, driven by Japan's low-interest-rate policy aimed at combating negative real wages and supporting economic growth. Market experts like Naoki Fujiwara of Shinkin Asset Management and Takashi Ito of Nomura Securities anticipate this monetary stance to continue benefiting Japanese equities, especially with the Bank of Japan's (BoJ) reluctance to implement sudden interest rate hikes. This view is reinforced by the Federal Open Market Committee's (FOMC) recent economic outlook upgrade, which left the crucial interest rate projections largely unchanged, easing market anxieties.

On the Tokyo Stock Exchange, a majority of sectors have experienced growth, led notably by the Pulp & Paper industry, while Marine Transportation saw a decline. The broader market trends show a promising upswing, with the TOPIX index up by 18% year-to-date and the MSCI Asia Pacific Index increasing by 5%. This positive sentiment is reflected in the valuation of TOPIX constituents, which are currently trading at 16 times their expected earnings for the next year, indicating robust investor confidence in the resilience and growth potential of Japanese stocks.