Photo/Illutration An electronic signboard in Tokyo shows the Nikkei 225 index at the 30,600 level on the morning of Sept. 14. (Hikaru Uchida)

The Nikkei 225 index surged 222.73 points on Sept. 14 to close at 30,670.10, a level not seen in about 31 years.

The index fell back on Sept. 15, ending the day at 30,511.71, down 158.39 points from the previous day’s finish.

However, market players have been optimistic about economic measures announced by candidates in the ruling Liberal Democratic Party’s presidential election.

Progress in the vaccine rollout against the novel coronavirus has also fueled buying on the Tokyo Stock Exchange.

Japanese stocks have been more sluggish than U.S. and European shares since spring, and investors saw “bargains” on the TSE, analysts said.

Foreign investors, who account for 70 percent of trading value on the TSE’s First Section, sold more stocks than they bought from May to August.

That trend was reversed in the first week of September.

The benchmark index on the First Section gained 2,100 points over eight trading days through Sept. 14 after Prime Minister Yoshihide Suga announced on Sept. 3 that he would not seek re-election in the LDP presidential race.

The index last reached the level of the Sept. 14 close in August 1990, during Japan’s asset-inflated economic bubble period.

“With more foreign investors showing a sense of relief about the future course of the government administration, funds are flowing into the market,” said Chihiro Ota, an analyst at SMBC Nikko Securities Inc. “The Nikkei 225 index could reach 34,000 or 35,000 by the end of fiscal 2021.”

Taro Saito, an analyst at the NLI Research Institute, took a more cautious view.

“Unless the government takes measures, such as expanding medical care capacity, to keep the economy running even if infection cases soar, Japanese stocks will continue to underperform U.S. and European stocks in the long run,” he said.