Why Japan’s Nikkei hits an all-time high

Market Performance & Key Drivers - Japanese equities experienced a stellar year, with momentum increasing after the US-Japan trade deal announcement [1][2] - The Nikkei 225 surged, particularly in the last three months, driven by growth stories in sectors like defense, autos, and semiconductors [3] - Political transition, specifically the appointment of a fiscal expansionist prime minister, boosted market sentiment [2][3] US-Japan Trade & Investment - Focus is on potential deals around defense and further trade negotiations concerning semiconductors [5] - The US investment fund's potential investment in Japanese pipelines is being viewed favorably due to the good relationship between the two countries [5] Fiscal Policy & Economic Impact - Fiscal expansion is expected to positively impact Japanese stocks in the medium term [5] - The administration aims to boost consumption and cap inflation, especially in rural economies, through targeted fiscal expansion [8] - The administration acknowledges the need to address structural growth issues and debt problems in the long term [7][8]