This must be good news for Japanese investors: the Nikkei index was up today by more than 2% at the start of the trading day. This boosting was mainly due to the depreciation of Yen and a good operating in the semiconductor segment. The appreciation of the yen against key trading partners included primarily the US dollar has been a bonus to the export driven firms with the effect of their exported goods getting cheaper in the international markets while the value of foreign income rises on conversion.

Seventeen percent of today’s market gains were thanks to the semiconductor industry. Japan’s chip related firms enjoyed their stock growth and this is an indication that the world wants more of these chips than it currently has. It is in line with comparable increase observed in the global rally of technology companies, that investors remain positive on tech companies.

This rise was further attributed by positive economic figures and corporate earnings that boosted the market’s momentum. It is expected that several major Japanese companies have recently reported improved financial result than market expectations which has helped the bullish trend in the market. Moreover, from the current economic signals, new economy indicators of some sectors of the Japanese economy has improved, largely enhancing investors confidence.

Market performance has also been dictated by the Bank of Japan’s monetary policy position. Despite the fact that the central has retained its loose monetary policy we have signs that some of them are calling for a gradual re-establishment of normalcy. This new shift in policy direction has introduce a new relationship strain in the financial market in that investors are keen and alert on any signals which may come from the BOJ.

This is good for the entire economy of Japan since the stock market has have risen in the recent past. There is the possibility of boosting the economic growth in a certain economy because high stock prices mean that people can spend more through the wealth effect. Also, since the Japanese companies are strong, this is likely to provide the country with more foreign inflows in a bid to boost the economy.

But, they are a problem for the Japanese economy complimented by a weak Yen as we shall see later. It is advantageous to exporters but on cumulative extortionate the price of imported articles thus causing inflation. It is against this background that policymakers are faced with a dilemma of how best to foster economic growth while at the same time controlling inflation.

Technology sectors have been capable of performing tremendously in Japan, and they are still working hard to ensure that they sustain the position of the country in the technological world. The current focus areas of innovation investment by the Japanese firms include AI, robotics, and innovative manufacturing techniques. This focus in the technology intensive industries is viewed as necessary for maintaining and enhancing Japans future economic growth.

At the close of each trading session the analysts will be on the lookout for signs that indicate that the current rally is likely to be affected. More so, the Japanese stock may be affected by the global economic climate, geopolitics, or shifts in monetary policies from the global central bank in the up coming days to weeks.

The rise in stock markets also affects the Japanese pension funds and the individual investors. Equity investors were likely pleasantly surprised by today’s increase in the stock market; many Japanese citizens use the stock market for retirement savings.

Moving forward to the future, much depends on such circumstances as further improvement of corporate earnings, the state of the global economy, and changes in the rules of monetary policy of Japan and other countries. Although the current positive change is always good news for investors or for the Japanese economy at large, there is always fear of depressant factors and even other inhibitors that may affect the market in the future.