Japan’s Nikkei hits record highs, Asian stocks rise on tech rally and rate cut hopes

Japan’s Nikkei hits record highs, Asian stocks rise on tech rally and rate cut hopes
Related media – Associated media

Fueled by a surge in technology stocks and growing expectations of a Federal Reserve rate cut, Asia-Pacific markets climbed on Thursday. The highlight was Japan’s Nikkei 225 Index, which breached the 42,000 mark for the first time ever.

The Nikkei gained nearly 1%, with technology stocks leading the charge. The broader Topix index also reached new highs, rising 0.7%. This rally mirrored the performance of U.S. tech giants the previous day, with chipmakers like Taiwan Semiconductor Manufacturing Company (TSMC) and Nvidia experiencing significant gains.

However, a separate report from Japan indicated a potential soft spot in the economy. Basic machinery orders unexpectedly fell for the second month in a row, potentially signaling weakening capital spending. This could pose a challenge to the Bank of Japan’s plans for policy normalization.

Elsewhere in Asia, South Korea’s Kospi rose modestly despite the Bank of Korea holding interest rates steady. Australia’s S&P/ASX 200 and Hong Kong’s Hang Seng Index also closed higher. Mainland China’s CSI 300 gained slightly.

The positive sentiment extended from Wednesday’s U.S. markets, where all three major indexes closed in record territory. The S&P 500 and Nasdaq Composite achieved their 37th and 27th record closes of 2024, respectively. This optimism stemmed partly from hopes of a potential rate cut by the Fed. Economists forecast June’s annual inflation rate to be lower than May’s, potentially prompting the central bank to ease monetary policy.

Related media – Linked media
By Ethan Brown Lambert

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