Japan’s Topix index closes at record year-end high, surpassing 36-year-old peak

Japan’s benchmark Topix index closed for the year at a record as it closed proceedings for 2025, surpassing even the peak 36 years ago reached during the infamous bubble economy in 1989.

The index ended the year's last session at 3,408.97, up from 2,881.37 at the end of 1989. In 2025, it increased by 22%, the third year in a row.

Following US President Donald Trump's "Liberation Day" tariffs, the Topix fell sharply in April. However, in July, it reached a record high due to the easing of trade war concerns and the relative undervaluation of Japanese equities in comparison to US and European markets.

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After that, it kept hitting new highs thanks to the Takaichi government, a worldwide money glut, and predictions of rising corporate profits.

Additionally, buying demand spread to small-cap companies, suggesting that the market's appeal has grown. For the first time since 2022, the Topix index's small- and mid-cap categories increased by 27% and 26%, respectively, this year, surpassing the 21% gain for large-caps.

For the second year in a row, the blue-chip Nikkei 225 Stock Average closed at a record year-end high of 50,339.48. The yearly growth reached 26%, surpassing the Topix for the third year in a row thanks to substantial contributions from a few large-cap firms.