Japan’s stock market ended 2024 on a high note, with the Nikkei 225 index reaching its highest-ever year-end close at 39,894.54. This remarkable performance capped off a turbulent year for Japanese stocks.
Investors bet heavily on the AI-related tech boom, corporate governance reforms, and the weak yen. The Nikkei average rose by 19% over the year, surpassing the previous year-end high of 38,915 set in 1989.
This growth outpaced other major indices like the S&P 500. Foreign investors showed renewed confidence in Japanese equities, with 10 consecutive weeks of net buying.
July 11 saw the Nikkei hit an all-time intraday high of 42,426.77 and a record closing high of 42,224.02. However, the market experienced a sharp downturn later in the summer.
On August 5, the average plummeted by 4,451.28 points, exceeding the infamous Black Monday crash of 1987. The yen-dollar exchange rate played a significant role in market volatility throughout the year.
The Bank of Japan’s indecisive policy stance contributed to currency fluctuations. A weaker yen generally benefits exporter stocks, and the currency weakened past 160 to the dollar earlier in 2024.
Japan’s Stock Market in 2024
Japan’s low interest rates allowed speculators to borrow yen and invest abroad. This carry trade reversed when the central bank hinted at policy changes, triggering the summer crash.
Towards year-end, the yen weakened again as the BOJ delayed rate hikes. Individual stocks saw impressive gains. Electric cable makers Fujikura and Furukawa Electric surged, with Fujikura’s stock price increasing sixfold.
Semiconductor test equipment maker Advantest also performed well, rising 97%. Looking ahead to 2025, potential challenges loom. Donald Trump’s possible return to the White House creates uncertainty.
The market could face another shakeup if Japan’s central bank resumes rate hikes. The Tokyo Stock Exchange broke tradition by not inviting a celebrity to sound the year-end closing gong.
This decision came after a former TSE employee and judge were indicted for alleged insider trading. Despite the turbulence, Japan’s stock market demonstrated resilience and growth in 2024.
The record-breaking performance reflects ongoing corporate reforms, global technological advancements, and renewed faith in Japan’s economic recovery.
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