© Reuters
Investing.com– Japan’s benchmark Nikkei 225 index surged past a key level in early trade on Monday, extending a technology-driven rally, while positive economic readings also helped improve sentiment towards the economy and over the Bank of Japan.
The rose as much as 0.8% to a record high of 40,308.0 points, crossing the 40,000 level for the first time in its history.
Technology stocks remained the biggest boosts to the index, with chipmaking and chip-adjacent stocks clocking sustained gains on persistent hype that artificial intelligence will drive a demand boom in the coming months.
Chip testing equipment maker Advantest Corp. (TYO:) jumped 3.7% and was close to a record high, while Tokyo Electron Ltd. (TYO:) hit a three-year high. SoftBank Group Corp. (TYO:) also traded near a three-year peak.
A tech-fueled rally on Wall Street provided a positive lead-in to Japanese shares, especially as the tech-heavy IXIC closed at a record high on Friday.
Japanese economy seen resilient, inflation set to ease
Key economic readings released on Monday also painted a positive picture for Japanese markets.
Japanese rose a substantially bigger-than-expected 16.4% in the fourth quarter, defying an unexpected slowdown in economic growth as business spending remained resilient.
Other data showed Japan’s – a key indicator of inflationary trends- unexpectedly slid to a six-month low in February. The reading, which comes amid a broader cooling in Japanese inflation, gives the BOJ little impetus to aggressively tighten monetary policy.
While the central bank is still expected to raise interest rates from ultra-low levels by as soon as April, it is still likely to keep monetary conditions largely loose, presenting a positive environment for Japanese stocks.
This story originally appeared on Investing
