The Japanese stockmarket smashed through the 30,000-point level for the key Nikkei index on Monday after official figures showed the country’s economy grew strongly in the final three months of 2020.
The Nikkei ended the day up 1.91% or 564 points at 30,084.15, topping the 30,000 point for the first time in more than 30 years. The Nikkei is up more than 9% so far this year and more than 16% in the last three months.
Topping the 30,000-point barrier however still leaves the Nikkei a long way from its property-driven all time high of 38,957 reached at the end of 1989.
Reuters said the last time the Nikkei traded above 30,000 was August 3, 1990, a day after Iraq’s surprise invasion of Kuwait.
The Japanese government said on Monday that the country’s economy Japan’s economy expanded more than expected in the fourth quarter, extending the recovery from its deepest postwar recession thanks to a rebound in overseas demand that boosted exports and business investment.
The world’s third-largest economy grew 3% in the final quarter or an annualised 12.7% topping market forecasts for a 9.5% gain (2.3% quarter on quarter).
That however was slower than the revised 5.3% or annualised 22.7% surge in the previous quarter, when the economy got a lift from pent-up demand after a previous state of emergency was lifted in May.
For the full COVID dominated year, Japan’s economy contracted 4.8%, the first annual fall since 2009.
Business investment rebounded by 3.2% from the 2.2% contraction in the three months to September.
But both private consumption (up 2.2% vs 5.1% in Q3) and public spending (2.0% vs 2.8%) grew at a softer pace as the third wave of infections hit the country in the closing months of the year and have continued into 2021.
Net trade contributed positively to growth, as exports jumped 11% (from 7.4% in Q3) while imports were up 4.1% from the 8.2% slump in the third quarter.
Japan’s October-December performance was stronger than US growth of 4% (annualised, or a 1% rise quarter on quarter) and a 2.8% slump in the euro zone. With two straight quarters of solid growth, Japan’s economy has recouped 90% of the cOVID0driven loss in growth earlier in 2020.
