Tokyo’s stock market reached a historic milestone on Thursday, February 26, 2026, as the Nikkei 225 index surged past the 59,000 level for the first time in history. The benchmark index climbed 1.1% during the session to reach an all-time intraday high of 59,332.43 before stabilizing near 58,989. This rally marks the third consecutive session of record-breaking gains for Japanese equities. The primary catalyst for this record run is the "Takaichi Trade." Investors are aggressively betting on the growth-focused economic policies of Prime Minister Sanae Takaichi. Her administration’s lean toward fiscal expansion and a continuation of "reflationary" policies has bolstered market confidence. This sentiment was further solidified by the recent nomination of two dovish, reflation-leaning academics to the Bank of Japan’s policy board, signaling that the central bank will likely maintain a cautious approach to further interest rate hikes. Monetary policy remains a central focus for traders. While the Bank of Japan raised its short-term interest rate to 0.75% in late 2025—the highest level since 1995—expectations for an immediate follow-up hike have faded. Current forecasts suggest the next move may not occur until the June 2026 meeting, following the conclusion of spring wage negotiations. This "wait-and-see" stance from the BOJ has kept the yen relatively weak, with the USD/JPY pair trading around the 156.00 range, providing a tailwind for Japan’s heavy exporters. Sector performance was dominated by technology and heavy industry. Despite a muted global reaction to Nvidia’s latest sales outlook, Japanese semiconductor and AI-related shares saw robust activity. Major gainers included Mitsubishi Heavy Industries, which rose 4%, and JX Advanced Metals, which gained 3.6%. The broader Topix index also hit a fresh peak, rising 1.45% to reach 3,895, reflecting a wide-based appetite for Japanese assets. While some analysts, including former central bank officials, have warned that high government spending could eventually stoke inflation and require tighter policy, the current market environment remains overwhelmingly bullish. Investors are focused on the "great shape" of the corporate sector, characterized by steady wage gains and solid earnings growth across the 225-issue average.