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Investing.com — Japan's Nikkei 225 index opened at a record high on Monday, extending its strength from last week as investors flooded into domestic stocks amid hype over the prospect of artificial intelligence and ultra-low interest rates. did.
The index rose 0.6% to a record high of 39,420.0 points, marking the second consecutive day of record highs following last week's strong gains.
The index is also within sight of the coveted 40,000-point level, a break above which could portend further gains.
Most of the increase in the Nikkei Stock Average came from catch-up trading after Japanese markets were closed for a three-day holiday.
The Nikkei average's rise was driven primarily by strength in large-cap technology stocks and semiconductor manufacturing stocks. Last week, the tech industry showed renewed strength following above-consensus earnings and guidance for his AI darling NVIDIA Corporation (NASDAQ:). This has raised hopes that demand for chips and technology will improve as AI develops.
However, overall Japanese stocks were also supported by the prospect of a prolonged period of ultra-dovish financial conditions, particularly as the Bank of Japan signaled a gradual exit from ultra-low interest rates.
This thinking has kept prices close to their lowest levels in 30 years and drawn more foreign investors into Japanese assets.
Data on Monday showed Japan's inflation rate, a leading indicator of consumer inflation, grew more slowly than expected in January, boding for a similar reading in data released later this week. Ta.
Slowing inflation will reduce pressure on the Bank of Japan to begin tightening policy, portending more favorable conditions for Japanese stocks.
The composite index rose 0.4% to 2,671.69 points, also trading at an all-time high.
