Agencies and staff reporter

Japanese stocks have surpassed a record high reached during the nation's economic heyday in 1989 although the country's manufacturing activity fell to its weakest in over three years.

Meanwhile, Hong Kong stocks extended the rally yesterday as investors expect stimuli from Beijing on the visit of a key central government official.

The Nikkei 225 closed at 39,098.68 yesterday, surpassing the previous peak set in December 1989, as chip-related stocks led across-the-board gains after US chipmaker Nvidia's outlook beat market expectations.

Japan's benchmark has rocketed about 52 percent from its January 2023 trough, supercharged by a tech-rally, corporate governance changes and rising exporters' profits thanks to a weak yen.

"This marks the arrival of a new era. It feels like the stock market is telling us that we've finally escaped from deflation and a new world has opened up," say traders.

This came as Japan's au Jibun Bank purchasing managers index for manufacturing sector activity slid to 47.2 in February - the lowest since August of 2020, and the ninth straight month in which the figure stayed below the boom-or-bust level of 50, S&P Global reported. The composite reading slid to 50.3, and services fell to 52.5.

In Hong Kong, the Hang Seng Index rose 239 points, or 1.45 percent, to close at 16,742 points yesterday as Hong Kong and Macau Affairs Office director Xia Baolong started his seven-day visit in the city.

Sa Sa International (0178) jumped 15.7 percent to HK$0.96 after reports that Beijing has agreed to expand the coverage of the individual visit scheme to those from more mainland cities following Hong Kong's request to allow more mainland tourists to come over.

This came as Fitch Ratings said it has maintained Hong Kong's long-term foreign currency issuer default rating at 'AA-' with a stable outlook.

In other news, the yuan's share in global currency payments rose to 4.51 percent in January from 4.14 percent a month earlier, according to the Society for Worldwide Interbank Financial Telecommunication.

Separately, global debts hit a record high of US$313 trillion (HK$2.44 quadrillion) last year, with half of new debts from developed countries, a report by the Institute of International Finance showed.

Developing economies also scale a fresh peak for the ratio of debt to their gross domestic product, the study showed.

The Nikkei soared 836 points to a new record. Reuters

Japanese stocks surpass 1989 peak