Tokyo Stocks Surge as Cooling U.S. Inflation Lifts Tech Shares
Japan’s benchmark Nikkei index jumped more than 1,000 points as easing U.S. inflation and strong semiconductor earnings boosted investor confidence.
Electronic stock board displays gains on the Tokyo Stock Exchange.
Nikkei surged on Wednesday as investors welcomed signs of easing inflation in the United States and increased buying in heavyweight technology stocks. Strong earnings from the semiconductor sector also strengthened market sentiment.
The 225-issue Nikkei Stock Average climbed 1,008.01 points, or 1.49%, to close at 68,751.51. The broader Topix index gained 49.14 points, or 1.22%, to finish at 4,088.12.
Shares of nonferrous metal companies, securities firms, and glass and ceramics manufacturers led gains on Tokyo’s Prime Market.
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The U.S. dollar traded mostly in the lower 162-yen range after the release of the June U.S. Consumer Price Index (CPI), which showed inflation continued to ease. The softer inflation data increased expectations that the U.S. Federal Reserve could maintain a less aggressive monetary policy.
Technology stocks drove much of the rally after Wall Street posted overnight gains. Investors continued to buy artificial intelligence and semiconductor-related companies as global demand for advanced chips remained strong.
Wataru Akiyama, a strategist at Nomura Securities, said AI and semiconductor-related shares led the market because demand for the sector continues to grow.
The market briefly erased most of its gains during morning trading as investors locked in profits. Fresh concerns over tensions in the Middle East also limited buying activity for a short period.
However, investor confidence quickly returned after Dutch semiconductor equipment maker ASML Holding reported stronger-than-expected second-quarter earnings and issued an optimistic business outlook. The positive results reinforced expectations for continued growth in the global semiconductor industry.
The renewed buying pushed the Nikkei back above the 1,000-point gain mark before the market closed, reflecting strong optimism for Japan’s technology sector despite ongoing geopolitical uncertainties.
