FX.co ★ Nikkei 225 Posts 28% Annual Jump, Extends Three-Year Rally

On the final trading day of the year, Tuesday, the Nikkei 225 increased by 132 points, or 0.25%, closing at 50,420. This rise reversed previous declines and secured a sturdy 28.1% gain for the year 2025. Achieving its third consecutive annual increase, the index was bolstered by Japan's ongoing economic recovery, strong corporate earnings, and diminishing global trade challenges, which helped counteract concerns over the Bank of Japan’s gradual interest rate hikes amid persistent cost pressures. Notably, this positive performance was driven by select heavyweight stocks despite a general sector weakness, with Fujitsu advancing 2.3%, Murata Manufacturing climbing 1.5%, and both Fast Retailing and Hoya Corp. gaining nearly 1%. Meanwhile, the broader Topix fell by 0.5% after earlier gains, highlighting disparities in market participation. Nevertheless, the Topix concluded 2025 with a significant increase of 22.4%, continuing its rally for a third straight year and reflecting the fundamental strength of Japan’s equity market despite short-term volatility. Markets are scheduled to reopen on Monday, January 5.