World shares started the week off with a rally, as Japan’s Nikkei 225 index closed above 30,000 for the first time since 1990. European markets closed sharply higher on Monday, following the advance in Asia. Shanghai and Hong Kong were closed for the Lunar New Year. US markets remained closed Monday for Presidents Day. The strong buying in Tokyo was driven by news that the Japanese economy grew at a nearly 13% annual pace in the last quarter, and by strong corporate earnings reports, the AP reports. It was the second straight quarter of growth after a downturn drastically worsened by the impact of the pandemic.
Japan's recovery should put the economy on track to recover to pre-pandemic levels by next year, helped by a recovery in demand for exports in the US and other major trading partners, Marcel Thieliant of Capital Economies said in a report. Japan recently re-imposed a state of emergency in Tokyo and several other prefectures to battle a resurgence of outbreaks. But sustained corporate investment and government spending are expected to help offset the impact on travel, restaurants, and other sectors most affected. The Nikkei 225 closed up 1.9% at 30,084.15. It was its highest level since August 1990, just as Japan's bubble economy was beginning to implode after peaking at nearly 39,000 in 1989.
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