Buybacks and big caps drive Nikkei beyond 198039;s bubble era
Foreigners return in force to lead rally after long absence
Valuations aren39;t excessive; analysts see further gains

SINGAPORE, Feb 22 Reuters Japanese stocks raced to a record peak on Thursday, breaking levels last seen in 1989 during the halcyon days of the bubble economy, as cheap valuations and corporate reforms lure foreign money looking for alternatives to battered Chinese markets.

The Nikkei share average rose as high as 39,156.97 points, above the previous intraday alltime peak of 38,957.44 points touched on the final trading day of 1989. On that day, the benchmark index closed at 38,915.87 while on Thursday the Nikkei finished 2.19 higher at 39,098.68.

The 34 years it has taken to regain its footing is a record, too, for a major market and is a decade longer than Wall Street took to recoup losses from the 1929 crash and Great Depression.

For us traders, this marks the arrival of a new era, said Tsutomu Yamada, senior market analyst at Au Kabucom Securities in Tokyo. It feels like the stock market is telling us that we39;ve finally escaped from deflation and a new world has opened up.

The index is up almost 17 this year after surging 28 in 2023, when it was the best performing Asian major bourse. The techheavy Nasdaq, by comparison, soared 43 last year and is up 6 so far in 2024.

Around 20 traders at brokerage Nomuras Tokyo trading floor were on their feet moments after afternoon trading…