The Topix and Nifty 50 indices soared to the highest level in years as foreign investors moved to Japan stocks. Topix jumped to a high of ¥2,127, the highest point in 33 years. It has jumped by more than 14.25% from the lowest level this year. The index has soared by over 20% from the lowest level in 2022. The Nikkei 225 index jumped to ¥29,873, 21% above 2022 lows.
Foreign investors inflows
The Topix index is one of the biggest indices in Japan. It is an index that tracks the 100 biggest companies in Japan. The Nikkei 225 index, on the other hand, tracks the biggest 225 companies in the country.
The Topix index has done well in the past few months as foreign investors buy the country’s stocks. There are two main reasons for this. First, Warren Buffett has been investing in Japan stocks in the past few years. He owns huge stakes in the five trading companies like Marubeni, Mitsui, and Itochu.
Second, the indices jumped as investors move to safety as Western companies go under pressure. For example, banks like First Republic, Credit Suisse, and Silicon Valley Bank have imploded in the past few months. Japan is also seen as a better bet against Chinese stocks that tend to be highly volatile.
There are other reasons why the Topix and Nikkei 225 indices have jumped. For example, there are signs that the Japan’s wage inflation is rising. Analysts expect that the Bank of Japan will maintain its dovish tone in the coming months.
Renesa is the best-performing stock in the Topix index after rising by 71% this year. Oriental Land, Asahi Group, Mitsubishi Electric, Keyence, Daikin Industries, and Marubeni Corp have been the best-performing stocks in the index this year. On the other hand, Ono Pharmaceutical, Dai-Ichi Life, Softbank, Resona Holdings, and Sumitomo Metal have been the worst-performing in the index.
Topix index forecast
Topix chart by TradingView
The daily chart shows that the Topix index has been in a strong bullish trend in the past few months. It has moved above the key resistance point at ¥2,071, the highest point on March 9. The index has moved above the 25-day and 50-day exponential moving averages.
At the same time, the Relative Strength Index (RSI) and the Stochastic Oscillator moved above the overbought level. Therefore, the index will likely continue rising as buyers target the next key resistance point at ¥2,300.
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