Good news for the Japanese economy.

According to Reuters, the Nikkei stock index reached an all-time high on February 22, breaking a record set 34 years ago. Expectations are high for another year of record profits for Japanese businesses and a return to growth.

Attracting investors

At the start of afternoon trading on the same day (Japan time) on the Tokyo Stock Exchange, the Nikkei 225 index rose by more than 760 points to 39,029, surpassing the record high of 38,957.44 points recorded in December 1989.

Japan is spending a lot of money to rebuild its chip manufacturing industry. Photo: REUTERS

According to Bloomberg, Japanese companies recorded record quarterly profits in the fourth quarter of 2023, bolstering the Nikkei 225 index to near its all-time high. Net income at companies in the Topix 500 index rose 46% year-over-year to a record 13.9 trillion yen (US$93 billion) in the fourth quarter of 2023. Excluding Softbank Group, whose earnings are volatile due to heavy investments in global technology companies, profits for companies in the index still increased by 25%.

Strong earnings growth suggests that although Japan's major stock indices have reached record highs, there is still plenty of room for further gains. Foreign investors such as BlackRock, Robeco Institutional Asset Management, and Warren Buffett have all expressed optimism regarding Japanese stocks. A Reuters survey released on February 22nd showed that stock analysts have raised their end-of-2024 forecast from 35,000 points (as of November 2023) to 39,000 points.

Yuichi Kodama, chief economist at the Meiji Yasuda Research Institute in Tokyo, believes the Japanese stock market has the momentum to rise further and aim for the 40,000-point mark. This partly reflects the attractiveness of the Japanese stock market to foreign capital.

Semiconductor industry is booming.

Japan's efforts to rebuild its semiconductor industry are yielding positive results as more and more chip companies from Taiwan expand their operations in Japan. According to Reuters, these moves are occurring against a backdrop of shifting alliances and priorities in the global chip industry, as the U.S. attempts to curb China's development in sophisticated semiconductors and strengthen partnerships with its allies.

According to Reuters data, at least nine Taiwanese chip companies have established stores or expanded their operations in Japan over the past two years. Many others are also considering strengthening their presence or making their first foray into the Japanese market.

Although Japan still prides itself on being the world's leading producer of semiconductor materials and equipment, its share of the global chip manufacturing market has fallen to 10% from 50% in the 1980s following trade tensions with the US and competition from South Korea and Taiwan. However, in recent years, Japan has invested heavily in rebuilding its chip manufacturing sector, as Tokyo recognizes the critical importance of semiconductors to its economic security.

On February 24th, TSMC, the giant chip manufacturer from Taiwan, will inaugurate its first factory on Kyushu Island in southern Japan. TSMC has also announced plans to build a second factory in Japan, bringing its total investment to over $20 billion.

Compiled by MINH CHÂU

Source: https://www.sggp.org.vn/tin-vui-cho-kinh-te-nhat-ban-post727733.html