Photo/Illutration The closing price of the Nikkei 225 index is displayed on Dec. 29 in Tokyo's Chuo Ward. (Kotaro Ebara)

The Nikkei 225 index closed at 33,464.17 on Dec. 29, the last day of trading on the Tokyo Stock Exchange, down 75.45 from the previous day but up by 28 percent year-on-year.

Although the TSE was mostly bullish throughout the year, the yen remained weak against the dollar in 2023.

The Nikkei average started 2023 at around the 25,000 level and climbed to 30,000 in May for the first time in 20 months.

The benchmark index continued its surge from May to June, rising by more than 4,000 points and hitting 33,753 on July 3, the highest level since March 1990 during the asset-inflated “bubble” period.

The yen, which started to sharply depreciate in 2022, failed to make a significant rebound this year. The Japanese currency fell to 151 yen per dollar in November.

However, the yen has since strengthened slightly, largely on expectations of U.S. interest rate cuts next year. The yen was hovering around the 141-yen level on Dec. 29.

Investors in 2023 were also looking for signs that the Bank of Japan would move away from its ultra-easy monetary policy under Kazuo Ueda, who was appointed central bank governor in April.

Long-term interest rates, as indicated by 10-year government bonds, rose from around 0.5 percent at the beginning of the year to close to 1 percent at the end of October.

Fixed mortgage rates, which are determined in conjunction with the long-term interest rates, also rose temporarily.

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