Japanese stocks closed higher following the announcement of a record budget by the Ministry of Finance.

Japanese stock indices experienced a significant rise during trading on Thursday following the announcement by the Japanese Ministry of Finance of a record budget for the next fiscal year amounting to 735 billion US dollars for the fiscal year 2025, which aims to increase social security costs and debt services.

At the same time, the Japanese government reported that it also plans to reduce new bond issuance to less than 30 trillion yen, marking the first time in 17 years.

On the other hand, the rise in Japanese stocks was also driven by statements from Bank of Japan Governor Kazuo Ueda this morning, who confirmed that real interest rates in Japan remain in negative territory.

In terms of trading, the Nikkei 225 index rose by 1.12% or 437.63 points to close the session at 39,568.06 points after a slight decline in the previous session.

Meanwhile, the broader TOPIX index increased by 1.2% or 32.92 points to record 2,766.78 points at closing, continuing its gains from the previous day.

The widespread gains were led by sectors such as durable goods, utilities, and logistics, with Toyota Motor shares rising by 6.0% after announcing plans to double shareholder returns to 20% by 2030.

Among the biggest gainers were Front Retailing shares, which recorded an 8.3% gain, and Isetan Mitsukoshi shares, which rose by 7.6%, as well as Mitsubishi Motors, which climbed by 6.5%.

At the same time, Honda Motor shares rose by 3.8%, marking their third consecutive session of gains, while Nissan shares jumped by 6.6% amid the announcement of their merger plans with Honda, scheduled to take effect in 2026.

On the other hand, media reports regarding a cyber attack on Japan Airlines caused a sharp decline in the company's shares during trading today, before modestly recovering by the end of the session.