Japan’s Nikkei 225 surged to a new three-month high, climbing 1.6% to reach 40,232.45 by midday.
This marks the index’s first rise above the 40,000 level since 19 July, following a public holiday closure on Monday. The broader Topix index also gained 1.14%, closing at 2,737.
The lift in Japanese equities mirrored Wall Street’s upbeat session, where the S&P 500 and Dow Jones both hit record levels.
A rally in semiconductor stocks, led by Nvidia, helped push the tech sector higher overnight.
Picture: Nikkei 225 chart reflects an overall bullish trend with the index closing at 40,186.15 after opening at 40,111.15. on the VT Markets app.
In Tokyo, chip-related shares followed suit, with Tokyo Electron climbing 5.07% and Advantest gaining 3.53%.
SoftBank Group Corp added further momentum, surging 6.85% after its subsidiary Arm Holdings performed well in the U.S. session.
These gains gave the Nikkei a strong push above the psychological 40,000 threshold, with the tech sector showing the strongest contribution to today’s rally.
The yen’s depreciation, trading near 149.98 against the dollar, added another tailwind for Japanese exporters.
A weaker yen typically boosts corporate earnings for firms that rely heavily on overseas markets by making their goods more competitive and improving profit margins when earnings are repatriated.
Export giants Toyota Motor and Sony Group both registered modest gains of 0.39% and 0.64%, respectively, reflecting optimism over currency trends.
The latest earnings reports have also set a positive tone, with Fast Retailing posting record profits, which could encourage further gains through the rest of the earnings season.
However, analysts remain cautious about external risks, especially from the U.S., where persistently high interest rates could dampen corporate earnings.
Lasertec Corp led the Nikkei’s gains today, jumping 7.38%, further signalling strong market enthusiasm for technology stocks.
If U.S. equities maintain their upward trajectory, Japan’s stock market could continue its current rally. However, traders remain mindful of potential corrections if yen volatility resurfaces or if U.S. rate expectations shift.
See also: Nikkei Rises Following Wall Street Gains
The upbeat sentiment in Tokyo reflects growing optimism among market participants, with a focus on the earnings season that could drive further gains.
A continued weak yen would likely sustain export momentum, while the performance of U.S. peers such as Nvidia may continue to influence Tokyo-listed tech firms.
This interplay between yen dynamics, U.S. markets, and corporate earnings will likely shape near-term movements in the Nikkei.
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