Japan’s Nikkei share average surged past the 43,000 mark for the first time on Wednesday, with the broader Topix index also hitting a record high, as both benchmarks extended their winning streaks to a sixth straight session.
The Nikkei climbed as much as 1.4% to reach 43,309.62 by 0140 GMT, up 7.5% since August 4. The Topix rose 1% to an unprecedented 3,097.94. Monday’s national holiday in Japan shortened the trading week but did not slow momentum.
The rally followed record closes on Wall Street, where the S&P 500 and Nasdaq advanced after July inflation data supported expectations for a U.S. Federal Reserve rate cut next month.
“A sense of relief is permeating through markets” after the latest Consumer Price Index reading, said Maki Sawada, equities strategist at Nomura Securities. She noted, however, that “there are signs that the Nikkei is overheated after its extremely steep rally, and a steep drop at any time wouldn’t come as any surprise.”
The index’s relative strength index (RSI) climbed above 75, well past the 70 threshold often viewed as a sign of overheating. A similar level on July 24 preceded a four-session decline.
A stronger yen, buoyed by dollar weakness on Fed easing bets, capped some gains for Japanese equities, particularly among exporters whose overseas earnings lose value when converted back into yen.
Out of the 225 stocks in the Nikkei, 183 advanced, 41 declined, and one was unchanged. Technology shares led the charge, with Renesas Electronics jumping over 7%, Advantest gaining more than 2%, and Sony Group rising 4.6%.
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