Nikkei closed higher recording its best January performance since 1998

Japan’s Nikkei index on Wednesday recorded its best January performance in 26 years, after overcoming declines in early trading led by chip company stocks.

According to Reuters, the Nikkei index recovered from sharp losses amounting to 1% in early trading to end the day up 0.61% to 36,286.71 points, increasing its gains for this month to 7.77%, which is its best start to the year since rising by about 9% in January 1998.

Thus, the Nikkei index is the best performing in the world, exceeding gains of 3.3% for both the Standard & Poor’s 500 index and the Nasdaq Composite.

The Nikkei currently remains about 1.9% lower than the 34-year peak of 36,984.51 points recorded on January 16, driven by a combination of foreign investor inflows from China, a weak yen that boosts profits, enthusiasm about corporate governance reforms, and tremendous momentum.

Chip industry heavyweights helped the Nikkei fall early, weighed down by disappointing financial results from Microsoft, Alphabet and Advanced Micro Devices. However, they cut their losses in the afternoon session.

Semiconductor equipment makers Tokyo Electron and Advantest lost a little more than 0.4%, while shares of SoftBank Group, which focuses on investing in artificial intelligence, fell 0.84%.

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