Nikkei closes at its highest level in 34 years

Japan’s Nikkei index closed at a 34-year high on Thursday, up more than 2% after a senior Bank of Japan official indicated that any tightening of monetary policy would be gradual.

According to Reuters, the Nikkei index ended the session up 2.06% at 36,863.28 points, the highest closing level since February 1990, when the country’s so-called “bubble” economy was just beginning to deflate.

Bank of Japan Deputy Governor Shinichi Uchida said in a speech in mid-morning trading that conditions are ripe for an exit from massive stimulus, but “even if the Bank of Japan ends its negative interest rate policy, it is difficult to imagine a path in which it continues to raise interest rates quickly.”

The yen fell against its major counterparts, providing additional strength to the Nikkei index, which includes a large number of exporting companies. A weaker currency amplifies the value of foreign revenues and makes products more competitive.

Shares of chip companies that are heavy on the Nikkei benefited from the gains of American semiconductor companies during the overnight hours, as Tokyo Electron and Advantest shares rose 3.35% and 7.56%, respectively.

The index also received a boost from the jump in shares of SoftBank Group, which focuses on artificial intelligence, as the stock gained 11.06% after ARM Holding Company expected sales and profits to exceed market expectations.

Pharmaceutical company Kyowa Kirin’s stock was the biggest percentage gainer on the Nikkei index, jumping 19.38% after announcing a share buyback.

On the other hand, shares of construction company Shimizu Corp. fell 16.15% after announcing its financial results.