Nikkei Average Hits New Record High of 52,518 Yen as Financial Leaders Express Optimism for 2026 Economy

Nikkei Average Continues Sharp Rise, Surpasses Record High

On January 6th, the Tokyo stock market saw the Nikkei 225 close up by 685 points at 52,518 yen, breaking the previous record set on October 31st of last year. Following the U.S. Dow Jones hitting new highs the day before, the index climbed into the 52,000s early in the morning and surged into the 52,500s in the afternoon.

Trading volume was lively, with 6.2 trillion yen on the Prime Market and 220 billion yen on the Growth Market, driven by strong buying from international investors. The Topix index also outperformed the Nikkei 225, hitting new all-time highs for consecutive days.

Economic Leaders Share Optimistic Outlook at New Year’s Celebration

At the New Year’s celebration hosted by Japan’s three major economic organizations, top financial industry leaders expressed confidence about the economy and stock market in 2026. Nomura Securities President Kentaro Okuda forecasted Japan and global economies to grow steadily, with an annual growth rate of around 0.9%, and predicted the Nikkei to reach 59,000 yen by the end of the year.

Sumitomo Mitsui Banking Corporation President Akihiro Fukumatsu highlighted ongoing economic momentum from last year, noting strong capital investment intentions. However, he also mentioned that the second half of the year will depend on U.S. midterm elections and economic policies under the new government, suggesting that a slightly stronger yen might be more beneficial for Japan’s economy.

Regional Business Leaders Support Wage Increases

At the Kansai region’s New Year’s gathering with local economic groups and government officials in Osaka, there was a shared optimism about wage hikes exceeding inflation. Shingo Torii, Chairman of Osaka Chamber of Commerce and Industry and Vice President of Suntory, emphasized Japan’s economic resilience and said that leveraging overseas technology in manufacturing could make wage increases possible.

Keiji Matsumoto, Chairman of the Kansai Economic Federation, expressed some concerns about high dependency on China but still rated the regional economy as fairly stable. JR West President Shoji Kurisaka also announced plans to raise wages and invest in human resources as consumer spending continues to grow.

Market Highlights and Future Outlook

• Declining Long-Term Interest Rates: Boosts buying of cyclical stocks, supporting further gains.
• Sector Trends: Oil, industrials, and securities sectors lead the rally.
• Key Focus Areas for Corporate Leaders: Stock prices, yen depreciation, wages, inflation, and AI integration are top priorities.

Major indices have been on an unstoppable upward trend early in the new year, breaking out of a mini triangle pattern. While the market showed signs of overheating and trading volume slowed toward the end, downward pressure remained limited due to a lack of selling interest.

Market Drivers and Reactions

U.S. markets closed with the Dow up 800 points, reaching a two-week high, while the Nasdaq and S&P 500 also posted gains, influencing the Japanese market. Financial stocks, including Mitsubishi UFJ and securities firms, hit new record highs, reflecting broad-based buying activity.

Comments from corporate leaders, inspired by positive developments like Kobe Airport’s internationalization, Osaka-Kansai Expo, and the Nikkei surpassing 50,000 yen, remain optimistic despite concerns over inflation and tense China-Japan relations.