On Monday, Japan’s main stock index, the Nikkei 225, reached a historic milestone, surpassing 40,000 points for the first time. This surge is attributed to corporate governance reforms and attractive valuations. The Nikkei rose 0.79% to 40,226 by midday, fueled by a strong performance in technology shares, following the trend set by their U.S. counterparts.
Overseas investors, focusing on medium- to long-term gains, are driving the market’s upward momentum, according to Masahiro Ichikawa, Chief Market Strategist at Sumitomo Mitsui DS Asset Management. The optimism in the market is expected to persist.
Japanese tech stocks benefited from the ongoing artificial intelligence boom in U.S. stocks, with chip-testing equipment maker Advantest and chip-making equipment giant Tokyo Electron experiencing gains. Advantest, serving U.S. AI firm Nvidia, saw a 3.9% increase, while Tokyo Electron rose by 2.7%. These companies contributed significantly to the Nikkei’s morning session rise.
Semiconductor-related companies also thrived, with Shin-Etsu Chemical, a manufacturer of semiconductor silicon products, increasing by 2.2%. JSR Corp, a major chipmaking photoresist producer, surged by 4.4% following reports that the Japan Investment Corp plans to initiate a tender offer for its shares later in the month.
The broader Topix index showed a 0.16% increase, reaching 2,713.79. Among the Tokyo Stock Exchange’s industry sectors, electric machinery was the third-largest gainer, rising by 1.2%. This followed pulp and paper firms, which climbed by 2.1%, and miners, which rose by 1.3%.
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