Japan’s stock market made history on Monday as the Nikkei 225 Index soared past the 50,000 mark for the first time, fueled by optimism over expected government stimulus under newly elected Prime Minister Sanae Takaichi
The benchmark Nikkei climbed 2.46% to close at 50,512.32 — its highest finish ever — extending a powerful rally that has gained momentum since Takaichi’s rise to leadership earlier this month. The broader Topix index also touched a record high, ending the day 1.7% higher at 3,325.05, marking a 19.4% gain so far this year.
Market enthusiasm stems from investor confidence that Takaichi, Japan’s first female prime minister, will maintain a strong pro-growth fiscal approach reminiscent of “Abenomics.” Since her election last week, the Nikkei has advanced roughly 2.5%, signaling renewed investor trust in the country’s economic direction.
John Pearce, Chief Investment Officer at UniSuper, remarked that the leadership change had brought visible market stability, which in turn has reignited investor sentiment.
Technology and AI-related stocks led the rally, echoing strength from U.S. markets. SoftBank Group surged 6.66%, propelling the index higher, while semiconductor testing firm Advantest gained 6.53%. Fujikura, a major producer of optical fibre for data centers, jumped nearly 8%.
According to Hiroyuki Ueno of Sumitomo Mitsui Trust Asset Management, many investors returned to buy on dips after brief declines last week, ensuring the upward momentum remained intact.
This milestone comes just months after the Nikkei crossed 45,000 in mid-September, highlighting the rapid pace of Japan’s equity revival. It also marks a turning point for a market that took more than three decades to recover from the asset bubble peak of 1989 — finally matching that level in February 2024.
Investor excitement grew after Takaichi’s pledge for a large-scale stimulus plan exceeding 13.9 trillion yen ($92.2 billion). Japanese markets have rallied since mid-July, when former Prime Minister Shigeru Ishiba faced political setbacks, leading to expectations of a more growth-focused successor.
Takaichi is set to meet U.S. President Donald Trump on Tuesday for a summit aimed at reinforcing economic and trade relations between the two allies. Her initial phone conversation with the President over the weekend signaled a commitment to deeper cooperation.
With sentiment running high and investors betting on aggressive fiscal measures, Japan’s stock market is showing its most dynamic momentum in decades — a strong indication that the country’s long period of economic stagnation may finally be fading.
