Nikkei surges above 38,000 in 34-year intraday-high

Japan’s Nikkei index surged Tuesday, gaining over 1,000 points to briefly trade above 38,000 for the first time in 34 years in a buying spree after a major technology firm revised its profit projections upward.

The 225-issue Nikkei Stock Average ended up 1,066.55 points, or 2.89%, from Friday at 37,963.97, its highest close since January 1990.

The broader Topix index finished 54.15 points, or 2.12%, higher at 2,612.03, its highest close since February 1990.

Tokyo markets were closed on Monday for a public holiday.

The Nikkei climbed to 38,010 at point point on Tuesday, not far from the record high of 38,957 the benchmark touched on Dec. 29, 1989. The Nikkei has gained more than 13% so far this year, after rising 28% in 2023.

The surge has been driven by foreign investors flocking to the market attracted by low valuations and changes in corporate governance, while a weakening yen this year has provided a further boost.

“The Nikkei rally has got an extra bump higher with ARM Holdings being the latest addition to the AI frenzy after strong results last week,” said Charu Chanana, head of currency strategy at Saxo Markets.

Shares of Arm Holdings have surged since Wednesday, after the company forecast better-than-expected quarterly results, powered by demand for its technology to design chips for artificial intelligence features.

Japanese equities also received a boost from Wall Street. Overnight, the Nasdaq briefly surpassed its record closing high from November 2021.

Otsuka Holdings was among the decliners, shedding 5.05% after the company said its experimental drug failed to meet a primary late-stage trial goal in treating agitation associated with dementia due to Alzheimer’s disease.