Japan's benchmark stock index, the Nikkei 225 average (Nikkei index), hit a record high and crossed the 65,000 level intraday. Analysts said explosive buying poured in as an unprecedented semiconductor rally coincided with an easing of Middle East geopolitical risks.
On the 25th (local time), according to a roundup of major outlets including Nikkei and Bloomberg, the Nikkei index in the Tokyo stock market pierced the 64,000 level right after the open and at one point in early trading jumped more than 1,900 points from the previous trading day to scale the 65,000 level. It is the first time the Nikkei has surpassed 65,000. The Tokyo Stock Price Index (TOPIX) also drew concentrated buying and broke the record high set in Feb.
On the 22nd, the Dow Jones Industrial Average on the New York stock market set a record high for the second straight day. As expectations grew that peace talks between the United States and Iran would make significant progress, signs emerged that geopolitical risk from the Middle East—the biggest overhang on the global macroeconomy—was subsiding, reviving investors' appetite for risk assets.
Experts said the surge of the Philadelphia Semiconductor Index (SOX), composed of major semiconductor corporations, by more than 2% in the previous New York session carried over intact to Tokyo. On the day, semiconductor equipment and manufacturing names such as Advantest, Tokyo Electron, and Kioxia Holdings led a broad rally and lifted the index. SoftBank Group, which has made large-scale AI investments, also drew heavy buying and set an all-time high since listing. Major cable stocks, including Fujikura and Sumitomo Electric Industries, were strong as well.
Experts predicted that a clear bull market is likely to continue for the time being as the easing of geopolitical uncertainty combines with growth in the AI industry. Bank of America said, "Despite the possibility of short-term corrections, we maintain a firmly bullish outlook on AI-related stocks." Global investment outlet TradingKit said, "The concentrated rise of semiconductor and AI theme stocks is the key driving force behind Nikkei's massive rally," adding, "Oil prices and macroeconomic indicators will act as additional sources of volatility going forward."