Thursday’s trading session saw a 2.19% increase in the Nikkei 225, closing at 39,098.68.
That exceeded the previous record closing high of 38,915.87, which was reached on the final trading day of 1989, December 29.
Following the US chip firm Nvidia’s impressive earnings report, which were fueled by demand for its artificial intelligence processors, Asian technology shares saw a spike.
Strong corporate earnings have attracted foreign investors back to the benchmark index, despite the nation’s economy being in a recession.
Because it makes their products more affordable in foreign markets, the weakening of the Japanese yen has also contributed to an increase in the share prices of Japan’s exporters.
After skyrocketing stock and real estate values for years, the Nikkei 225 reached its previous record high.
In less than three years following that peak, the benchmark index had a nearly 60% value loss due to an economic crisis that gripped the Japanese economy.
Deflation, or declining prices, and little to no economic development have plagued Japan ever since.
Deflation is detrimental to an economy because it causes people to postpone purchasing expensive goods in the hope that they will become more affordable later on.
Official data released last week revealed that, in the final three months of 2023, the Japanese economy had suddenly entered a recession.
