Tokyo’s benchmark Nikkei 225 last week made history by hitting its highest level in nearly 35 years.

Tokyo’s benchmark Nikkei 225 index rose nearly 0.7 percent in morning trading on Monday, extending a rally that has made Japanese stocks some of the hottest buys of the past year.

Major gainers included Mitsubishi UFJ Financial Group and pharmaceutical company Daiichi Sankyo.

On Thursday, the Nikkei passed its all-time high of 38,915.8, reached in 1989 as Japan’s economy was on the precipice of an asset crash that set in motion several “lost decades” of economic stagnation.

The Nikkei gained 28.2 percent throughout the whole of 2023, well ahead of the S&P500, which itself enjoyed a bumper year.

Foreign cash has poured into Japanese stocks as investors take advantage of the cheap yen and corporate governance reforms that have boosted shareholder returns.

Japan’s overall economy, however, has continued to struggle with anaemic growth amid structural challenges that include a shrinking population and rigid labour force.

The Japanese economy officially entered recession earlier this month, relinquishing its place as the world’s third-largest economy to Germany.

Elsewhere, other Asian markets on Monday fell.

Hong Kong’s Hang Seng and the Shanghai Composite both dipped 0.7 percent, while South Korea’s Kospi slid 0.8 percent.