Nikkei Index Surpasses 70,000 Mark on AI Stock Rally
Japan's Nikkei index climbed 2.53% to cross 70,000 for the first time in three months, driven by AI stocks and U.S. economic data.
The Nikkei index climbed 2.53% to 70,037.61 by the midday break on Monday, crossing the 70,000 threshold for the first time in three months. This rally was primarily driven by AI-related stocks, with Tokyo Electron gaining 5.7%, Advantest rising 4.5%, and SoftBank Group advancing 3.68%. The surge followed a rise in U.S. equities after weaker-than-expected jobs data lowered expectations for a Federal Reserve interest rate hike.
While the Nikkei surged, the broader Topix index saw a more modest gain of 1.16%, indicating the advance was narrowly concentrated in the technology sector. Bank of Japan Deputy Governor Uchida characterized the growth of AI as a significant positive demand shock.
Conversely, Japan's bond market faced pressure as the 30-year government bond yield reached a record 4.235%. Investors are now awaiting a policy speech from Prime Minister Sanae Takaichi to determine her fiscal stance and potential shifts in reflationary policy, particularly as the United States pressures Japan to address the weakness of the yen.
