The Nikkei share average scaled a 34-year peak on Friday, recording its best week since March 2022, underpinned by receding bets on an early exit from the Bank of japan (BOJ) stimulus and sheer momentum as foreign investors returned.

The Nikkei closed Friday¡¯s trading 1.06% higher at 35,422.95, after rising as much as 2.25% to 35,839.65 for the first time since February 1990. The index rallied nearly 7% and marked a multidecade high every trading day this week.

Technical indicators were flashing warning signs, however, with one such measure ¡ª the relative strength index, or RSI ¡ª climbing to 74.55 for the Nikkei. Readings above 70 indicate an overheated market.

Nikkei volatility has spiked over the past two days to reach the highest level since Oct. 31, when the BOJ unexpectedly tweaked policy to allow bond yields to rise further.

¡°It wouldn¡¯t be unusual to see a retracement at any moment of the steepest part of this rally,¡± Nomura Securities strategist Maki Sawada said, adding that she had expected the Nikkei to decline at Friday¡¯s open.

The rally was supported by receding bets for an end to the BOJ¡¯s negative rate policy at its Jan. 22-23 meeting, following the devastating New Year¡¯s Day quake on the Noto Peninsula in Ishikawa Prefecture.

Wage data this week has given further incentive for the central bank to hold fire on any hawkish shift.

At the same time, Finance Ministry data on Friday showed foreign investors bought a net ?296.2 billion of Japanese equities in the week to Jan. 6, following two weeks as net sellers.

So far this year, the Nikkei has climbed 6.3%, the only major global stock index to post gains other than the U.S. S&P 500, which is up 0.21%. Britain¡¯s FTSE lost nearly 2% and Hong Kong¡¯s Hang Seng tumbled 4.43%.

¡°Foreign investors think the Japanese market is relatively better than other markets: It is not as extended as U.S. markets, and the economy is better than Europe or China,¡± said Shinji Abe, an equity strategist at Daiwa Securities.

¡°Given the current strong momentum, the Nikkei can reach above 36,000 or even get close to 37,000 in the near term.¡±