Japan's stock market close to historic peak despite a recession

Hong Kong, Feb 16: Japan's stock market defied gloomy economic data to rally Friday, lifting broader Asian shares and ending the week on a buoyant note, the media reported.

Japan's benchmark Nikkei 225 index closed above 38,000 points for the second day in a row, just a whisker off its historic peak reached in December 1989.

The stock market gains, which followed a rebound on Wall Street, came despite official data showing on Thursday that the country slipped into recession in 2023, losing its crown as the world's third-largest economy, CNN reported.

"The nine-month rally in Japanese stocks has had nothing to do with economics and, for that reason, yesterday's weak (fourth-quarter) GDP read and a shrinking economy in US dollar terms due to a weak yen (are) not deterring investors," said Neil Newman, a Tokyo-based strategist at Japanmacro.

"If anything, the window of opportunity created by the weak yen is encouraging international investors, as they suspect it will close soon," he added, CNN reported.

The yen has fallen more than six per cent against the US dollar so far this year, after losing about eight per cent against the greenback in 2023. A weaker yen makes shares in Japanese companies cheaper for foreign investors.