Asia-Pacific Markets Surge as Japan and Taiwan Hit Record Highs

Asia-Pacific markets experienced a notable upswing on Thursday, with Japan's major indexes and Taiwan's benchmark reaching all-time highs. The Topix index climbed 0.92% to close at 2,898.47, surpassing its previous record of 2,886.50 set in December 1989. Similarly, the Nikkei 225 rose 0.82% to finish at 40,913.65, exceeding its earlier high of 40,888.43 from March this year. In a significant move, major Japanese financial institutions, including Tokio Marine and Sompo, announced plans to sell 535 billion yen ($3.3 billion) in Honda cross-shareholdings. In a positive development for the Japanese economy, the country's largest labor union, Rengo, reported that companies are implementing the largest wage increases in three decades. Union-backed workers can expect an average pay rise of 5.1% for the fiscal year ending March 2025. Larger firms with over 300 union members raised wages by 5.19%, while smaller companies increased pay by 4.45%. This wage growth is anticipated to foster a "virtuous cycle" of rising prices and wages, potentially enabling the Bank of Japan to adjust interest rates and normalize its monetary policy. Meanwhile, Taiwan's Weighted Index also achieved a new high, closing up 1.51% at 23,522.53, driven by strong performances from chip stocks. Notable gains were seen in Hon Hai Precision Industry (Foxconn), which rose nearly 6%, and Taiwan Semiconductor Manufacturing Company, which increased by 2.66%. Investors also monitored regional economic indicators, including a decline in Hong Kong's composite purchasing managers' index, which fell to 48.2 in June, signaling a contraction in private sector output for the second consecutive month.