Japan’s Nikkei jumps on weaker yen, renewed AI optimism

TOKYO: Japan’s Nikkei share average jumped for a second day on Monday, buoyed by a weaker yen and renewed enthusiasm over artificial intelligence (AI) investments.

The Nikkei 225 Index soared 2% to 50,480.76 by the midday break, after a 1% gain on Friday.

The broader Topix rose 0.8%. US stocks closed higher on Friday, helped in part by strong forecasts from chipmaker Micron Technology that re-ignited optimism around AI-related shares. SoftBank Group, a major Japanese investor in AI, jumped 5.1%.

Reuters reported on Saturday that the company was racing to close a $22.5 billion funding commitment to OpenAI by year-end.

“Last week saw gains in US shares driven by positive news related to semiconductors and AI,” said Maki Sawada, an equities strategist at Nomura Securities.

“That momentum is also visible in today’s Japanese stock market.”

The Bank of Japan on Friday raised its key interest rate to a three-decade high. Japanese bond yields surged, and the yen weakened sharply, as BOJ Governor Kazuo Ueda was not as hawkish about policy tightening as markets had anticipated.

“Normally, rising interest rates should weigh on the stock market,” Sawada said.

“However, the rise in Japanese shares appears to be driven by expectations that economic policy measures, specifically proactive fiscal policy, will lead to an improving economy.”

There were 133 advancers on the Nikkei index against 89 decliners.

The largest gainers in the index were Resonac Holdings, up 7.8%, followed by Mitsui Kinzoku, a key supplier to the AI sector, which jumped 7.7%.

The largest losers by percentage in the index were NH Foods Ltd, down 4.3%, followed by SHIFT, which slid 4%.‑Reuters