Japan’s Nikkei stock index breaks its 1989 record and surges to an all-time high

Japan’s benchmark Nikkei 225 index surged Thursday past the record it set in 1989 before its financial bubble burst, ushering in an era of faltering growth.

The index closed Thursday at 39,098.68, up 2.2%. Its previous record was 38,915.87, set on Dec. 29, 1989. So now it is back to where it was 34 years ago.

That was more than a generation ago at the height of Japan’s post-war boom. But this time around, the economy is in recession and nobody’s talking about a bubble. Preliminary measures of exports, manufacturing, services and other indicators released Thursday suggested continued weakening.

The market sank after hitting its 1989 peak, as banks wrote off some 100 trillion yen in bad debts. Share prices remained well below the record for many years — dipping below 7,000 at one point before a series of market-boosting measures championed by the late Prime Minister Shinzo Abe in 2013 began nudging them higher.

The market has logged sharp gains in recent months, helped by strong interest from foreign investors who account for the majority of trading volume on the Tokyo exchange.

Heavy buying of computer chip-related shares helped drive Thursday’s rally after Nvidia reported after U.S. markets closed that it had more than tripled its revenue from a year earlier thanks to the craze for artificial intelligence. Tokyo Electron’s shares jumped 6%, Advantest Corp. soared 7.5% and SoftBank Group Corp. was up 5.1%.

Unlike in the United States, where shares have been topping records on hopes the Federal Reserve will begin cutting high interest rates once it decides inflation is truly under control, in Japan the benchmark rate has remained at minus 0.1% for over a decade.

The Bank of Japan is still using its easy money policies to