The Nikkei 225 index of Japan has been flying up by over 65% since the mid tariffs doldrums of the year 225 when the index has made new highs of approximately 50,309. The abrupt upswing follows several months of volatility in the area of trade, and has been the best since the index was launched in 1950.
Analysts explain the surge by the loosening of U.S.-Japan tariff tensions in the administration of President Trump. According to J.P. Morgan research, tariff rollbacks would increase the GDP of Japan by 0.3 and corporate profits by 3%. The exporters of Japan particularly in automobile and electronics are once again picking the pace as trade barriers come down.
The 24 hour trading information of the Nikkei indicates that it has gained by 2.05 percent in a day, with the highest trading values of 50,511 and the lowest being 49,851. The 1.64K volume was achieved and the post-tariff recovery range indicated that it increased by 66.75 percent of the lows at around 30,000 points. This rally was the first to exceed the record high of 38915 in 1989 by almost 29 percent.
Japanese momentum was reflected in the world stock markets. S&P 500, Euro Stoxx 50 and MSCI Asia Index also had multi-month highs. Ultra-loose policy by Bank of Japan such as negative interest rates and buying bonds has ensured that the cost of borrowing is low. Analysts observe that such an environment coupled with declining tariffs made Japanese equities one of the global outperformers in 2025.
The crypto analysts who posted it such as CryptoRover attribute the equity boon to resurgent risk appetite in digital assets. Traditionally, stock exchanges are bullish prior to upswings in Bitcoin and Ethereum, which may indicate a potential spillover effect. There is a threat of overheating by some strategists. The P/E ratio of the Nikkei forward is currently higher than 20x compared to its 10-year average of 15x. In case of poor earnings or reemergence of tariff, corrections may follow. The attitude in social media is still very positive. Analysts believe that the recovery in Japan is a milestone but it requires long-term fundamentals.
