TOKYO: Japan’s Nikkei share average climbed over 1% to a more-than-two-month peak on Wednesday, as a rebound in US AI chip star Nvidia overnight sent investors snapping up technology-related stocks.
The Nikkei was up 1.41% at 39,726.39 by the midday break, its highest since April 12, while the broader Topix rose 0.64% to 2,805.13.
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 broader chip sector outperformed, with the Philadelphia Semiconductor index adding 1.8%. The Nasdaq rallied 1.3%.
“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 during the morning session to end up 6.6%.
Chip-making equipment giant Tokyo Electron gained 3.2%. Together, the two shares lifted the Nikkei by about 209 points.
Japan’s Nikkei closes at highest since mid-April
Electronic machinery makers added 1.5% to lead sector gains among the Tokyo Stock Exchange’s 33 industry subindexes. Market participants may also be re-investing increased dividend payouts into the market after a batch of payments this week, giving some degree of extra support to shares, said Sumitomo Mitsui DS Asset Management’s Ichikawa.
Dividends have improved 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.
After retreating in April, however, the index has struggled to maintain the 39,000 level over recent months amid tepid company revenue outlooks and concerns about currency and bond market volatility.
Investors are also waiting for further clarity on the Bank of Japan’s monetary policy path. Among other heavyweight stocks, Fast Retailing rose 1.5%, AI-focused startup investor SoftBank Group gained 1.4%, and electrical components maker TDK was up 3.1%.
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