Nikkei Trades Higher

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Nikkei Trades Higher

Nikkei 225 Trades Near 41000 After Boj Meeting

The Nikkei 225 index of Japan inched higher on Thursday as the Bank of Japan introduced its first rate hike. Although the BoJ has ended its dovish stance, it seems investors are still optimistic that it will stay dovish.

That's why the aftermath of the BoJ led to a 2% jump in the Nikkei 225 index. For now, the Nikkei 225 can be seen near 40787 points and is only a few inches away from the 41K.

What's more interesting is that the gains in the Nikkei 225 index were broad-based. In particular, the technology stocks secured the most gains on account of the ongoing AI boom all over the world.

Nikkei 225 Showed A Delayed Reaction

According to some experts, the upside in the Nikkei 225 on Thursday was actually a delayed reaction. But why the wait? Well, Wednesday was the off-day for the Japanese markets.

In a surprising turn of events, BoJ not only ended the negative rates but also went ahead with a 0.1% hike, its first ever in the last 17 years. Despite the rate hike, the BoJ governor made it clear that the monetary policy will still remain accommodative.

In fact, the BoJ also signaled that they will continue to buy assets as well in order to shore up the economy. So in a sense, it seems that the Nikkei 225 investors are right that the bank will still be dovish.

One particular sector of the Japanese economy that continues to remain uncertain is private consumption. Although the wage increase has already occurred, some experts believe that it will still not be enough.

Another factor that supported a strong Nikkei 225 was the optimism seen on Wall Street, which also surged higher after the Fed announcement.

Given the current circumstances, some believe that the Nikkei 225 could reach a peak at 41000 points. As a result, some rangebound movement will come next for the Nikkei 225 in the next few months.

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