Japan’s benchmark Nikkei 225 has ended 2025 at its highest year-end level on record, closing above the 50,000 mark after a year marked by sharp volatility, strong corporate earnings and a powerful rally in technology shares.

Although Tokyo equities slipped on the final trading day before the New Year holidays, the index still finished the year up 26%, Kyodo News reported, having added more than 10,000 points over the past 12 months. The Nikkei closed on December 30 at 50,339, while the broader Topix index also fell modestly on the day.

The rally came despite a turbulent first half. The index began the year around 40,000 before being jolted in April by a global sell-off triggered by the introduction of aggressive US trade tariffs. That episode delivered one of the largest single-day point losses in the Nikkei’s history.

Sentiment improved markedly over the summer after Tokyo and Washington reached a trade agreement that eased tariffs on automobiles and other goods, alongside a gradual thaw in US–China trade tensions. According to Kyodo, from mid-year, solid profits at Japanese companies and surging demand linked to artificial intelligence drove renewed investor appetite, particularly for semiconductor-related stocks.

The market gained further momentum in the autumn following the launch of Prime Minister Sanae Takaichi’s administration, which signalled a commitment to economic expansion supported by active fiscal policy. The Nikkei briefly touched a record intraday high above 52,000 in October.

Elsewhere, the yen traded narrowly against the dollar in thin holiday conditions, while Japanese government bond yields edged higher as investors continued to price in the possibility of further interest rate rises by the Bank of Japan.