Tokyo has overtaken Shanghai to become Asia’s largest stock exchange, driven by investors keen to get exposure to the region while mitigating risks in China. However, China is an important source of revenue for Japanese firms in crucial industries, which would be hard hit by a deeper downturn in the world’s second-largest economy.
Tokyo stocks were mixed, the first trading day of 2024, as exporters received a boost from the yen's weakness following a major earthquake in central Japan while technology shares were sold, tracking their U.S. counterparts.
Tokyo stocks are expected to test an all-time high in 2024 on hopes of robust corporate results and real wage growth, overcoming a stronger yen that will pressure exporters amid prospects of policy changes by the Japanese and U.S. central banks.