Japan stocks surge at start of 2026
Nikkei jumps nearly 3 percent as markets reopen
Japan’s Nikkei climbed nearly 3% in the first trading session of 2026, closing at 51,737.80 while the broader Topix hit a record 3,478.27, as markets reopened after the New Year holiday. The rally, which ended a brief year‑end losing streak, was led by technology and export-oriented stocks and was supported by a weaker yen that bolstered expectations for overseas earnings.
Finance Minister Satsuki Katayama, who marked the session by striking the exchange’s ceremonial bell, pledged that Japan would not return to deflation and outlined plans for “responsible and proactive” fiscal measures to concentrate investment in growth sectors. She said the government aims to build a stronger economy and expressed hope that markets could reach further record highs in 2026. Officials emphasized policies to promote investment, strengthen corporate governance and support wage growth so that equity gains translate into broader economic benefits.
Investors attributed early buying to optimism that easing inflationary pressures and stable monetary conditions could sustain growth, though analysts warned that volatility may persist. Key risks cited include global interest-rate policies, China’s economic trajectory and currency swings, any of which could influence Japanese equities in coming months. Despite those cautions, some market observers pointed to structural reforms, improved returns on equity and corporate governance efforts as factors that have increased the attractiveness of Japanese stocks to both domestic and foreign investors.
The session followed a weekend of dramatic international developments that added to geopolitical risk assessments among market participants. While the market's strong start was welcomed by policymakers as a sign of investor confidence, critics cautioned that rising asset prices do not automatically reflect improvements in household living standards. Whether the Nikkei can sustain momentum and reach the finance minister’s envisioned records will depend on corporate earnings, policy clarity and the global economic backdrop as the year unfolds.
