Japan’s Nikkei share average surged to a record high on February 10, driven by robust quarterly earnings and optimism from Prime Minister Sanae Takaichi’s landslide election victory. The broader Topix also hit a record intra-day high. Global investors are poised to accelerate fund flows into Japanese stocks.
On the Tokyo Stock Exchange, Japan’s Nikkei 225 index jumped 2.5% to a record high of 57,760.09 in early Tuesday trade. The broader Topix index, which also hit a record intra-day high, advanced 1.9% to 3,854.16. The Nikkei is up 12% so far this year.
The surge comes as quarterly earnings season gets underway in the world’s fourth-largest economy, with markets buoyed by Prime Minister Sanae Takaichi’s landslide victory in Sunday’s general election. Expectations are rising that her overwhelming win will enable bold spending and tax relief measures.
“Following the ruling coalition’s landslide victory in the general election, expectations for proactive fiscal policy are rising, and hopes for an economic boost are spreading in the domestic stock market,” said Takayuki Miyajima, a senior economist at Sony Financial Group.
Cable maker Furukawa Electric (5801.T) soared over 21% after solid earnings reported the previous day, becoming the Nikkei’s best percentage gainer and nearing its daily upper limit. IT services firm NEC (6701.T) shares rose 7.2% following a share buyback announcement on Monday. SoftBank Group (9984.T), seen as a bellwether for artificial intelligence investment sentiment in Japan, provided the biggest uplift with a 10% gain, amid a U.S. high-tech rally and ahead of its earnings on Thursday.
There were 188 advancers against 36 decliners on the Nikkei index.
Global investors are looking at earnings-supportive factors like improved growth dynamics, corporate reform, and reflation after Takaichi’s historic triumph. Tomochika Kitaoka, chief equity strategist at Nomura Securities, forecasts net foreign buying of ¥10 trillion ($64.1 billion) over the next three months, at the earliest, if expectations rise that the Takaichi government can implement growth strategies within moderate fiscal expansion—possibly surpassing levels seen during former Prime Minister Shinzo Abe’s era.
