The Nikkei hit its highest level since February 1990 and is expected to hit its best weekly level in 22 months

(1) The Nikkei index hit its highest level since February 1990 on Friday and is expected to record its best weekly performance since March 2022, driven by weakening bets on the Central Bank's early exit stimulus and the return of foreign capital. (2) The Nikkei Stock Average rose 1.06% to 35,422.95 at noon, and rose 2.25% to 35,839.65 at the beginning of the session for the first time since February 1990. The Nikkei is up 6.13% for the week. (3) However, there were warning signs from technical indicators, with the Nikkei Relative Strength Index (RSI) rising to 73.63. Data over 70 indicates that the market is overheated. (4) A measure of the Fluctuation of the Nikkei. Surged over the past two days to its highest level since Oct. 31, when Japan's Central Bank unexpectedly adjusted policy to allow bond yields to rise further. (5) Maki Sawada, a strategist at Nomura Securities, said: "It's not uncommon for the Nikkei to pull back at any time at the height of this rally," she said, adding that she had expected the Nikkei to open lower on Friday. "We're also heading into the weekend, so this is a ripe environment for short-term profit-taking. ” (6) The Rebound of the Nikkei supported the of the Nikkei after the decline in bets on the negative Intrerest Rate policy of the Japanese Central Bank at the end of the January 22-23 meeting after the massive New Year's Day earthquake on the Noto Peninsula. (7) Wage data released this week further prompted the Central Bank to hold off on any hawkish shifts. Meanwhile, foreign investors bought a net 296.2 billion yen ($2.04 billion) of Japanese stocks in the week ended Jan. 6, after two weeks of net selling, data released by the Ministry of Finance on Friday showed. (8) Shinji Abe, equity strategist at Daiwa Securities, said: "Foreign investors believe that the Japanese market is relatively better than other markets: it is not as expansive as the US market, and the economy is better than that of Europe or China. Given the current strong momentum, the Nikkei could break through 36,000 points or even approach 37,000 points in the short term."