Japan Nikkei surges to an all-time high

Japan share market finished session sharply higher on Thursday, 22 February 2024, with the Nikkei225 index closing at an all-time high, surpassing the previous record set 34 years ago, thanks to strong company earnings. The weakness of the Japanese currency has also helped to boost share prices.

Japan's benchmark has rocketed about 52% from its January 2023 trough, supercharged by a tech-rally, corporate governance changes and rising exporters' profits thanks to a weak yen.

At closing bell, the 225-issue Nikkei Stock Average index surged 836.52 points, or 2.19%, to 39,098.68. The broader Topix index of all First Section issues on the Tokyo Stock Exchange spurted 33.41 points, 1.27%, to 2,660.71.

Total 31 of 33 TSE sectors closed higher, with Electric Appliances, Transportation Equipment, Machinery, Oil & Coal Products, and Mining issues being notable gainers, while Pharmaceutical issue was notable loser.

On the economic news front, the manufacturing sector in Japan continued to contract, and at a faster pace, the latest survey from Jibun Bank revealed on Thursday with a manufacturing PMI score of 47.2. That's down from 48.0 in January, and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction. A steep reduction in new orders led to production shrinking at the fastest rate in a year. In turn, purchasing activity fell sharply while lower capacity pressure led to employment levels falling at the quickest pace since January 2021. The survey also showed that the services PMI eased from 53.1 in January to 52.5 in February. Despite easing slightly in the month, the latest expansion extended the current sequence of growth to 18 months. Moreover, the rate of growth in new business accelerated during February and was the strongest recorded since last August.

Japan Composite PMI Slips to 50.3 in February-The au Jibun Bank Japan Composite PMI fell to 50.3 in February from January's 51.5, indicating a slowdown in economic activity. Services growth decelerated, while the manufacturing sector contracted the most in 3.5 years. New export orders declined further, but new orders saw a slight expansion. Employment rose at the fastest pace in eight months, driven by the service sector, while manufacturing reported the sharpest reduction in workforce numbers in over three years.

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