Nikkei Reaches New Heights on Hopes for Stimulus and Trade

Tokyo's Nikkei 225 Index hit an all-time high on Tuesday, surging past 44,000 as market sentiment improved. Investors were encouraged by two key factors: a positive trade development and the prospect of increased government stimulus. Early trading saw the Nikkei 225 climb over 0.5% to 44,018.78, with the broader Topix index also rising by 0.4%.

The rally was boosted by news that U.S. tariffs on Japanese autos are slated to be reduced by September 16, a confirmation that came from Japan’s chief tariff negotiator, Ryosei Akazawa, on X. This announcement cleared up previous uncertainty about a July trade agreement and brought confidence back to export-focused sectors.

Adding to the positive mood was the political landscape. The resignation of Prime Minister Shigeru Ishiba, who was known for his conservative fiscal approach, has opened the door for new leadership. Reports from Kyodo news agency indicate that Sanae Takaichi, a proponent of both government stimulus and monetary easing, is now a candidate in the leadership race for the Liberal Democratic Party. This has heightened expectations for more supportive economic policies.

The market's performance reflected this optimism, as 144 companies on the Nikkei gained while 77 saw declines. Leading the charge were Advantest, which increased by 6.7%, and Tokuyama, which was up by 5%. On the other hand, Citizen Watch saw a drop of 5.8%, attributed to its upcoming removal from the Nikkei in October. Takeda Pharmaceutical also fell, sliding by 2.4%.