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Japanese stocks approach record high set in 1980s

Japan’s Nikkei 225 continued to see solid gains on Tuesday, coming within 1,000 points of its high of 38,916 set in 1989. The rapid march upwards has followed a series of all-time highs on Wall Street in recent weeks. US tech stocks took a break on Tuesday after a setting multiple records in recent sessions.

Shane Strowmatt, LGT
Reading time
5 minutes
Japan Economy
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In Tokyo, the Nikkei 225 broke the 38,000 mark for the first time since 1990, but closed just slightly below the level, gaining just under 3% on Tuesday. The macroenvironment was supported by the Corporate Goods Price Index, which came in at 0.2% growth in January, ahead of the 0.1% market consensus. In individual stocks, Softbank continued to support the wider market, rallying strongly since the end of last week due to explosive gains at its Arm Holdings chip semiconductor company, which is expected to profit from the boom in artificial intelligence. Arms Holdings stock has almost doubled since last week while Softbank’s stock gained 6.3% on Tuesday.

Elsewhere in the Asia-Pacific region, stock markets were mostly in operation again on Tuesday, with the exception of Hong Kong and mainland China, which remained closed for the Lunar New Year festival. Hong Kong markets will reopen on Wednesday. In South Korea, the Kospi was trading up almost 1% after trading started back up following a long weekend for the Lunar New Year. In Australia, the S&P/ASX 200 was down 0.2%.

In New York, stock indices took a break after the S&P 500 closed above the 5,000 mark for the first time ever to finish last week. The Dow Jones Industrial was the only of the three major indices to finish in positive territory, gaining 0.3% on Monday. The S&P 500 had to return gains made early in Tuesday’s session for a total loss of 0.1% on the day. Tech stocks also backed off of all-time highs with the Nasdaq-100 falling 0.4%. Investors are awaiting more corporate earnings and inflation data due to Tuesday before making their next move.

In individual stocks, shares of shale company Diamondback Energy gained almost 10% after it announced a plan to buy Endeavor Energy Partners, the largest privately held oil and gas producer in North America’s Permian Basin. The deal is worth USD 26 billion and follows similar purchases by American oil majors Exxon and Chevron. While European counterparts have focused on the shift towards renewable energies, US energy companies have continued to invest heavily in fossil fuels and have used proceeds of high oil prices in the last couple years to acquire larger shares of the hydrocarbon energy market.

Corporate news in focus: Quarterly figures from Coca-Cola, Welltower.

Economic data in focus: UK unemployment, Swiss Consumer Price Index, Germany’s ZEW Indicator of Economic Sentiment, US Consumer Price Index.


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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

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