The Nikkei 225 index hit a new high

The Nikkei 225 hit a new record high on February 3rd. After a two-day hiatus, the Nikkei 225 rose 2065 points (3.92%) to close at 54720, its highest closing price since January 14th. The rally was fueled by gains in US stocks the previous day, a depreciating yen, and a strengthening dollar in the foreign exchange market, leading to a renewed surge in semiconductor stocks. The temporary halt to the panic selling of gold in commodity futures also contributed to the improved market sentiment.

The Nikkei 225 continued its upward trend in the morning session and climbed further in the afternoon. One of the factors driving the Japanese stock market higher was the US Manufacturing PMI released on February 2nd by the Institute for Supply Management (ISM). Improved new orders and production activity contributed to the stock market’s rise.

The index reached 52.6, exceeding the 50-point threshold separating expansion from contraction, marking a new high in approximately 3 years and 5 months since August 2022, and also surpassing the market expectation (48.4) compiled by Dow Jones Newswires. Hiroshi Namioka, Chief Strategist at T&D Asset Management, pointed out: “The US economy has shown greater resilience than expected at this stage. This strengthens expectations for continued expansion in corporate performance and is driving the improvement trend to spread from high-tech related sectors to other industries.”

On February 3, gold prices rebounded sharply in the Japanese domestic commodity futures market, also boosting investor risk appetite. Previously, influenced by the announcement of the next Federal Reserve (FRB) chairman, market expectations for a Fed rate cut weakened, causing a sharp drop in gold prices both domestically and internationally. However, on February 2, gold prices showed signs of stabilizing in the New York market, leading to a rise during the Asian trading session on February 3. In the Tokyo market, Sumitomo Metal Mining, which owns near-current assets, saw its share price fall by more than 11% the previous day, but rose by as much as 5% today.

As Japanese listed companies enter the peak period for releasing financial reports from April to December 2025, “earnings report trading,” a short-term trading strategy based on stock price fluctuations after the release of financial reports, is becoming increasingly active. TDK and Kyocera were among the companies favored by investors that day, with both companies’ share prices rising by about 10%. TDK and Kyocera raised their consolidated net profit (according to International Financial Reporting Standards) forecasts for fiscal year 2025 (ending March 2026) on February 2nd, exceeding market expectations and receiving positive feedback from the stock market.

Keiaki Tomori, executive fund manager at Mitsubishi UFJ Asset Management, stated, “Against the backdrop of rising memory prices, electronic component companies had previously been concerned about declining smartphone and PC sales and held a cautious view of future performance. Therefore, this strong financial report is significant.”

According to statistics from Nikkei, as of January 30th, approximately 70% of companies that have released their financial reports for April-December 2025 achieved year-on-year profit growth, reaching the highest level in four years. Market expectations for the next fiscal year have also been revised upwards. Data from Nomura Securities shows that as of January 29th, among major companies excluding the financial sector, analysts predict a 6.7% year-on-year increase in recurring profit for fiscal year 2026, higher than the 2.5% in fiscal year 2025, with profit growth expected to accelerate further.