Japan’s Nikkei share average climbed more than 1 per cent to secure a 2½ month closing peak on Wednesday (Jun 26), as investors snapped up technology stocks and chip-related heavyweights surged.
The Nikkei rose 1.26 per cent to 39,694.50, its highest closing level since April 9, after touching a near three-month intraday high of 39,788.63.
The broader Topix finished up 0.56 per cent to 2,802.95.
Japan’s technology-related shares rallied after a lull earlier this week, following a strong performance by AI chip firm Nvidia and other US tech megacaps overnight.
“The rise in US tech stocks has generated a pretty strong tailwind” for Japanese equities, becoming the driving force of the day, said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.
Advantest, which counts Nvidia among its customers, surged 7 per cent to be the largest percentage gainer of the day, while fellow chip-related firm Tokyo Electron added 3.6 per cent. Together, the two stocks lifted the Nikkei by 231 points.
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Electronic machinery makers rose 1.4 per cent to lead sector gains among the Tokyo Stock Exchange’s 33 industry subindexes.
Market participants may also be re-investing dividend payouts into the market after a batch of payments this week, giving some degree of extra support to shares, said Ichikawa.
Dividends have increased as Japan pushes for corporate governance reform. Those reforms have been one of the big supports that helped the Nikkei reach an all-time peak of 41,087.75 on March 22.
The Nikkei’s break higher on Wednesday gave an additional boost to investor sentiment.
After retreating in April, the index had struggled to get above the 39,400 level amid tepid company revenue outlooks and concerns about currency and bond market volatility.
Investors have also been waiting further clarity on the Bank of Japan’s monetary policy path.
On Wednesday, among other heavyweight stocks, Fast Retailing rose 1 per cent, AI-focused startup investor SoftBank Group gained 1.6 per cent, and electrical components maker TDK was up 2.5 per cent. REUTERS