Japan's Nikkei jumps over 3% to end at 2-week high on AI-stock rally, strong corporate outlook

TOKYO: Japan’s Nikkei share average rose more than 3% to close at a two-week high on Wednesday asAI-related stocks jumped to track their U.S. peers, and  investors scooped up stocks with a strong outlook.

The Nikkei rose 3.66% to 66,300.44, its highest close since July 23, while the broader Topix climbed 2.13% to 4,046.17.

The S&P 500 and the Dow closed at record highs on Tuesday, powered by the latest batch of earnings from AI-related companies such as Caterpillar and Palantir that assuaged demand concerns, while crude prices and Treasury yields dropped on hopes for a deal in the Iran war.

Chip-testing equipment maker Advantest and chip-making equipment maker Tokyo Electron rose 8.77% and 3,26%, respectively, tracking the Philadelphia Semiconductor index’s 6.6% gain overnight.

The U.S. chip index rose for a fourth straight session after tumbling 20.6% in July.

Murata Manufacturing, a leading maker of multi-layer ceramic capacitors (MLCCs) used to regulate power in AI servers, jumped 9.82% after raising its annual net profit forecast.

“Compared with the past, more companies raised their annual outlook in the first quarter, which means they had made modest forecasts due to the impact of the Middle East war,” said Daisuke Hashizume, a senior strategist at Daiwa Securities.

“A series of upward revisions of forecasts of Japanese firms is a positive factor for overall equities,” he said. Fanuc rose 4.41% after the robot maker raised its annual net profit forecast.

Bank shares rose, with Mitsubishi UFJ Financial Group and Mizuho Financial Group up 2.05% and 4.17%, respectively.

Bucking the trend, Uniqlo-brand owner Fast Retailing fell 2.33%, and air-conditioning maker Daikin Industries fell 6.31%, weighing the most on the Nikkei.

Of more than 1,500 stocks trading on the Tokyo Stock Exchange’s prime market, 65% rose, 31% fell and 3% traded flat.