As the Nikkei Stock Average in the Tokyo stock market continued to hit an all-time high in about 34 years since the bubble burst in 1990, Ilhak ants (domestic investors who invest in Japanese stocks) began purchasing leveraged funds.
According to the Korea Securities Depository on the 12th, from the 3rd to the 11th, ‘Nomura Next Fund Nikkei 225 Leverage Fund’ and ‘Rakuten Nikkei 225 Leverage Fund’, exchange traded funds (ETFs) that invest leverage in the Nikkei 225 index (Nikkei average stock price). Net purchases amounted to $8.77 million (KRW 11.6 billion) and $7.46 million (KRW 9.8 billion), respectively.
This is interpreted as a surge in buying to take advantage of market and foreign exchange gains as the Tokyo stock market soared, with the Nikkei index exceeding the 35,000 mark for the first time since 1990.
Following the upward trend of technology stocks in the U.S. stock market, Japanese semiconductor companies are also showing strength, and the Nikkei index is continuing its upward trend. On the 11th, the Nikkei 225 index (Nikkei average stock price) closed at 35,049.86, up 608.14 points (1.77%) from the previous trading day, continuing its rise for four consecutive days.
In addition, the introduction of the new small investment tax exemption system (NISA), which began this year, is also supporting the rise in stock prices. This year, 10 years after the introduction of NISA, Japan introduced a new NISA that simplified the product structure and significantly increased tax savings.
Do-seon Lee, ETF management division manager at Mirae Asset Global Investments, said, “Starting this year, the limit for NISA accounts, a tax-free system for small investments, has increased significantly, and transactions by individual investors have become more active.” He added, “Also, expectations for a change in monetary policy by the Bank of Japan (BOJ) have partially receded, leading to a decline in the yen.” “The stock prices of export companies are showing particularly strong performance,” he analyzed.
Manager Lee added, “We actively promoted shareholder-friendly management, such as share buybacks, on the Japanese exchange, which led to a buying trend from foreign investors who were previously heading to China and Hong Kong.”
The market predicts that the Japanese stock market will continue its bull market for the time being. Kim Chae-yoon, a researcher at NH Investment & Securities, said, “If the U.S. Nasdaq is strong, we believe that the Japanese stock market’s record high in 33 years is likely to continue.” He added, “The recovery of manufacturing production activities, the increase in inbound consumption, and the Japanese government’s large-scale economic measures will improve the economy.” On the back of this, gradual economic expansion of around 1% is expected to continue. “Based on the solid domestic economy, the long-term upward trend in the stock market will be maintained,” he predicted.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.