The Nikkei 225 stock average topped 70,000 for the first time ever on Tuesday as peace negotiations advance in the Middle East and after the Bank of Japan voted to raise its benchmark rate to 1%, from 0.75%.
With the U.S. and Iran reaching an interim agreement that will reopen the Strait of Hormuz, a surge in risk appetite drove Japan¡¯s benchmark index to the milestone.
The rally of the Nikkei 225 has been swift ¡ª the index took less than two months to climb from 60,000, a level it first breached on April 23, to 70,000.
On Tuesday morning, the index was range-bound below 70,000, and then broke through in a dramatic run after the central bank announced its rate decision just after noon. The Nikkei 225 hit 70,020.68 at 12:45 p.m.
Artificial intelligence and semiconductor-related stocks have continued to gain ground, while buying has also spread to a broad range of stocks on expectations that oil supply could stabilize globally.
The key question for the market going forward is whether the risk factors stemming from Middle East tensions have truly been resolved, as no text of the U.S.-Iran agreement has been released.?
The two countries are expected to sign a memorandum of understanding in Switzerland on Friday.
¡°The Deal with the Islamic Republic of Iran is now complete,¡± U.S. President Donald Trump posted on Truth Social on Monday.?
¡°Ships are starting to move, many loaded up with Oil, out of the Strait of Hormuz.¡±
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