Nikkei Stock Briefly Hits Record High After Inflation Surges in Japan

Japan’s Nikkei 225 index reached a new all-time high, briefly surpassing 41,000 on Friday, driven by the country’s rising inflation rate in February. Meanwhile, other markets in the Asia-Pacific region experienced declines.

Japan’s headline inflation rate for February rose to 2.8%, up from 2.2% in January. Core inflation, excluding fresh food prices, also increased to 2.8% from 2% the previous month.

In its monetary policy statement on Tuesday, the Bank of Japan (BOJ) stated its commitment to achieving the 2% price stability target sustainably.

However, the Nikkei 225 retreated slightly to close just below 41,000, ending the day 0.18% higher at 40,888.43. The broader Topix index also set a new record, gaining 0.61% to 2,813.22.

In the U.S., all three major indexes hit new records overnight.

In contrast, Hong Kong’s Hang Seng index fell 2%, weighed down by electric vehicle stocks following a nearly 2% gain on Thursday. Mainland China’s CSI 300 index dropped 1.05%.

The Hang Seng Tech index declined by 4%, with Li Auto’s shares plunging 10% after the company lowered its first-quarter delivery forecast.

South Korea’s Kospi slipped 0.2%, reversing gains from the previous day, while the Kosdaq index remained flat.

Australia’s S&P/ASX 200 declined 0.15% to 7,770.6, while Taiwan’s Weighted Index traded close to unchanged levels after the central bank unexpectedly raised its policy rate on Thursday.

In the U.S., continuing the rally from Thursday after the Federal Reserve’s decision to keep rates unchanged and maintain its rate cut forecast for 2024.

The Dow Jones Industrial Average surged 269.24 points, or 0.68%, to close at 39,781.37. The S&P 500 rose 0.32% to end at 5,241.53, while the Nasdaq Composite edged up 0.20% to finish at 16,401.84.

“People have faith in the Fed right now, and that cuts are coming,” said Jay Woods, chief global strategist at Freedom Capital Markets. “We are in a good place, and the market believes in the smooth landing narrative. Whatever the Fed is saying continues to be the music to the ears of the market.”

Josh Alba
Josh Alba
Josh Alba stands at the forefront of contemporary business journalism, his words weaving narratives that illuminate the intricate workings of the corporate world. With a keen eye for detail and a penchant for uncovering the underlying stories behind financial trends, Josh has established himself as a trusted authority in business writing. Drawing from his wealth of experience and relentless pursuit of truth, Josh delivers insights that resonate with readers across industries.
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