Japan’s Topix stock index breached bubble-era highs to hit a record high as buying momentum extended beyond a limited number of stocks, underscoring the rally’s solid foundation.
The broad benchmark rose as much as 0.6% to 2,887.97 at around 9:09 a.m. on Thursday, surpassing the previous all-time intraday high set in December 1989. Nearly all 33 industry subindexes in the index of more than 2,000 companies rose, with automakers leading the gains. Insurers and banks have been among the best performers since the index bottomed out in mid-April on expectations that the Bank of Japan will raise interest rates, boosting their profitability.
“Unlike the Nikkei 225, which is biased toward certain stocks, the Topix movement indicates that the Japanese market as a whole has bottomed out and reached a record high,” said Hideyuki Ishiguro, chief strategist at Nomura Asset Management. With Japan emerging from deflation, valuations are still low compared to the U.S., he added.
