Tokyo Stock Exchange Soars as Tech Shares Ride High
Key Highlights :
Tokyo's benchmark Nikkei index surged to a fresh three-decade peak on Tuesday, led higher by technology shares on expectations of a flood of investment in chip-related companies. SoftBank Group Corp jumped 5.54% on reports it may team up on an AI venture with ChatGPT operator OpenAI and that its semiconductor unit Arm is in investment talks with Intel Corp. Chip-testing equipment maker Advantest Corp soared 3.73%. Toyota Motor Corp shares leapt 4.45% after the automaker announced plans to market next-generation battery electronic vehicles (EVs) from 2026.
The Nikkei climbed for a third-straight session, adding 1.58% to 32,946.49 at the midday break, set for the highest close since July 1990. The broader Topix gained 1.11% to 2,263.61. Global shares climbed on Monday ahead of closely watched US inflation data on and policy decisions from the Federal Reserve, Bank of Japan, and other central banks.
Toyota’s EV strategy “was well received by the market, and also last night the US market was strong, so we have a strong market today,” said Daiwa Securities strategist Kenji Abe. With expectations of a soft landing in the US and Fed easing later in the year, “this high valuation is likely to continue for the time being,” he added.
Among Nikkei constituents, 169 companies advanced, while 55 declined. Drugmaker Eisai Co Ltd was an outlier, falling back 3.84% after a surge on Monday on positive news about its Alzheimer’s treatment. The auto sector rose 3.19% to become the best performer among the Tokyo Stock Exchange’s 33 industry sub-indexes. A basket of shipping companies was the biggest loser, falling 0.91%.
The rise in the Nikkei index was driven by a surge in tech shares, as investors were optimistic about the prospects of chip-related companies due to a potential influx of investments. SoftBank Group Corp, Advantest Corp, and Toyota Motor Corp all saw their shares rise significantly on Tuesday.
The market was also buoyed by anticipation of the US inflation data and policy decisions from the Federal Reserve, Bank of Japan, and other central banks. With expectations of a soft landing in the US and Fed easing later in the year, the high valuation of the Nikkei is likely to continue in the near future.
Overall, the Tokyo Stock Exchange saw a broad-based rally on Tuesday, with the auto sector being the best performer among the 33 industry sub-indexes. The drugmaker Eisai Co Ltd was the only company to fall back, after a surge on Monday on positive news about its Alzheimer’s treatment.
In conclusion, the Tokyo Stock Exchange experienced a surge on Tuesday, with tech shares leading the way. The Nikkei index is set to close at its highest level since July 1990, thanks to a flood of investment in chip-related companies, as well as anticipation of US inflation data and policy decisions from the Federal Reserve, Bank of Japan, and other central banks. With expectations of a soft landing in the US and Fed easing later in the year, the high valuation of the Nikkei is likely to continue in the near future.
