The Nikkei 225 surged to a new all-time high in early trading on Thursday (March 7), a rally that reflected Wall Street's overnight rally as Federal Reserve Chairman Jerome Powell made clear signs of a rate cut in 2024.。

Speculation about a possible policy shift by the Bank of Japan boosted heavyweight bank stocks, but the surge in technology stocks appeared to be slowing.。The Nikkei 225 index soared to 40,499 shortly after the market opened..An all-time high of 0 points。Previously, the index had been choppy for two trading days after breaking the 40,000-point mark.。

While technology stocks have mostly driven the Nikkei's recent rally, Thursday's gains were driven mainly by industrial and financial companies.。Kawasaki Heavy Industries Co., Ltd. (TYO: 7012) Becomes Index Biggest Gainer, Up 8.3%, while large bank Sumitomo Mitsui Financial Group (NYSE: SMFG) (TYO: 8316) rose more than 4%.。

A boost on US Wall Street also boosted Japanese stocks, with US market indices closing higher overnight as Federal Reserve Chairman Jerome Powell hinted the bank would cut interest rates in 2024.。Although Powell did not disclose the exact magnitude or timing of the rate cut, the market expects a move to lower lending rates this year。

In Japan, heavyweight bank stocks were supported, with widespread expectations that the Bank of Japan will soon end its ultra-low interest rate policy.。Shares of Mitsubishi UFJ Financial Group Co., Ltd. (NYSE: MUFG) (TYO: 8306), the country's largest bank, rose 1.8%, while Tokyo-Mitsubishi UFJ Financial Group Co. Ltd. (TYO: 8308) rose 3.4%。

According to official data released on Thursday, the average cash income of Japanese employees rose more than 2% in January, higher than expected。Other data show the rate of decline in real incomes is the slowest in 13 months。Higher wages were one of the main criteria reviewed when the Bank of Japan raised interest rates for the first time since 2007.。

Experts expect the Bank of Japan to raise interest rates in March or April 2024。