The Nikkei 225 Stock Average has amassed 14.6% gains YTD, notching 34-year highs and approaching the all-time high, while the TOPX has risen 11.2% YTD. According to zh.cn.nikkei.com, some heavyweights have surged alarmingly so far this year, likely to be boosted by tremendous buying by SWFs from Gulf countries known as the "Oil Five".

According to the report, the heavyweight semiconductor manufacturing equipment maker TEL, for example, has shot up about 40% YTD, far outperforming the index. This may be due to the Middle East capital rush to buy the stock.

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The FTSE Japan 100 Shariah Index, which consists of Islamic-compliant Japanese companies, was picked by Middle Eastern capitalists as an investment target. As of the end of January, the top-weighted stock in the index was TEL (4.6%). Shin-Etsu Chemical (4.3%), Hitachi (3.9%), Mitsui (3.4%) and Mitsubishi Corporation (3.3%) were the second to fifth most heavily weighted stocks in the index since April 2023.

In addition, Bloomberg revealed that the TOPIX 500 companies reported all-time-high profits for the fiscal quarter ended December 2023, pushing the Nikkei to a record high. TOPIX 500 companies tracked net profit rise of 46% YoY to JPY13.9 trillion (about USD93 billion) in the last quarter, hitting a new high.

Strong earnings from Japanese companies mean the TOPIX 500 still has immense upside, according to the report. BlackRock (BLK.US)      , Robeco and Warren Buffett expressed bullishness on Japanese stocks successively.
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