\n
![](\"https:\/\/content.fortune.com\/wp-content\/uploads\/2024\/03\/GettyImages-2049065914-e1709522271816.jpg?w=2048\")
<\/p>\n [ad_1]
\n<\/p>\n
It\u2019s been a good few weeks for the Japanese stock market. The Nikkei 225, a major index for the Japanese equity market, beat a 37-year-old record<\/a> set in 1989 just a little under two weeks ago. The rally picked up steam again on Monday, as the Nikkei 225 crossed<\/a> 40,000 points for the first time in morning trading.<\/p>\n The increase was driven by tech shares, which have driven much of the Nikkei\u2019s increase. Tokyo Electron, which makes semiconductors and chipmaking equipment, is up by over 140% over the past year. The Nikkei 225 was Asia\u2019s best performing<\/a> market in 2023, recording a gain of more than 25%.<\/p>\n Foreign capital is piling into the Japanese market, following famed investors like Berkshire Hathaway CEO Warren Buffett, who expanded his holdings<\/a> of major Japanese trading houses last year. BlackRock, the world\u2019s biggest asset manager, and Amundi Asset Management, Europe\u2019s largest money manager, expect earnings growth and changes in corporate keep the strength going, according<\/a> to Bloomberg.<\/p>\n One reason for optimism could be strong performance from Japanese firms. Earnings for the last quarter of 2023 were 45% higher year-on-year, according to<\/a> Goldman Sachs analysts. The weaker yen is also playing a role, making Japanese exports cheaper while also increasing the value of profits repatriated from overseas. <\/p>\n And then there\u2019s a push for<\/a> better corporate governance. The stock exchange is pushing the country\u2019s sprawling conglomerates, known as keiretsu, <\/em>to streamline their organizational structure. It\u2019s also encouraging companies to disclose plans to boost their capital efficiency. <\/p>\n Analysts think the Nikkei\u2019s rise isn\u2019t over. The Nikkei breaking 40,000 \u201cis likely to be a more bullish signal rather than fueling any concerns of Japanese stocks being overbought,\u201d Charu Chanana, the head of FX strategy at Saxo, told Bloomberg<\/a>. <\/p>\n<\/div>\n<\/div>\n\n