Japan’s Nikkei Hits Record High Above 43,000 as US Inflation Data Fuels Rate-Cut Hopes

Tokyo – Japan’s Nikkei stock index closed above the 43,000 mark for the second consecutive day on Wednesday, reaching an all-time high after lower-than-expected US inflation data boosted optimism for the US economy and raised expectations of an earlier interest rate cut by the Federal Reserve.

The benchmark index gained 1.3%, or 556.50 points, to end the day at 43,274.67. Air travel, nonferrous metals, and service-related stocks were among the top performers on the Prime Market, according to Kyodo News. The yen, considered a safe-haven asset, weakened as equities rose and investor risk appetite increased, briefly pushing the US dollar to the lower 148-yen range in Tokyo.

July’s annual US inflation rate came in at 2.7%, below the market expectation of 2.8%, while monthly inflation stood at 0.2%, according to the Bureau of Labor Statistics. The data drove the Nikkei to its fifth straight day of gains, although profit-taking later in the session trimmed some advances after the index rose more than 700 points at one stage, following a cumulative gain of over 2,400 points in the past five trading days.