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The Nikkei 225 has powered up to 26-year highs this week and this is only the latest chapter of an astonishing run higher which began in early September.



Fundamentally the Tokyo equity benchmark’s vigour is partly explained by the return of Prime Minister Shinzo Abe in October’s snap election. A better-than-expected second-quarter earnings season has also helped. Around 62% of listed companies managing to beat estimates, with heavyweights like Sony, Honda and Toyota all pleasing the crowds. Wall Street’s succession of highs and a rising US Dollar have done the rest, taking the index up by more than 20% for the year so far.

Despite such chunky gains the index appears to be retaining its vigour. Indeed, Thursday’s trade could see it break the uptrend channel which has contained the climb since September the 8- to the upside.

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