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Nikkei Hits Record High as AI Chip Stocks Power Japan Market Rally

Nikkei Hits Record High as AI Chip Stocks Power Japan Market Rally. Source: Kakidai, CC BY-SA 4.0, via Wikimedia Commons

Japan’s Nikkei share average surged to a fresh record high on Wednesday, driven by strong gains in chip-related stocks as investor enthusiasm around artificial intelligence continued to fuel global technology markets. The Nikkei index climbed 1.25% to 65,811.78 after briefly touching an all-time intraday high of 66,428.81 earlier in the session. Meanwhile, the broader Topix index edged up 0.15% to 3,944.19.

Technology and semiconductor-linked shares led the rally, mirroring overnight gains on Wall Street where the Nasdaq and S&P 500 reached record closing highs. Investor demand remained heavily focused on AI and semiconductor companies, while financial and traditional value stocks lagged behind.

Tokyo Electron and Advantest, two major Japanese chip equipment manufacturers, both jumped more than 5%, helping lift the Nikkei to new highs. Analysts said market momentum remains concentrated in AI-related equities as traders seek stronger growth opportunities in the technology sector.

According to market strategist Kazuaki Shimada of IwaiCosmo Securities, investors are prioritizing high-growth semiconductor shares over value stocks because tech companies continue delivering stronger returns. The market also reflected U.S. trading patterns, where semiconductor stocks rallied while the Dow Jones Industrial Average declined.

Despite the broader optimism, some AI-related stocks posted losses. SoftBank Group dropped 4.3%, while chip designer Socionext plunged 5.8%, becoming the biggest percentage loser on the Nikkei index. Analysts noted that investors are rotating between different AI-themed stocks rather than exiting the sector entirely.

Japanese banking shares also weakened, with Mitsubishi UFJ Financial Group and Mizuho Financial Group falling 0.49% and 0.95%, respectively. The Topix banking index declined 0.76%, while the real estate sector dropped 1.48%, making it the worst-performing industry group of the day.

On the Tokyo Stock Exchange prime market, approximately 44% of stocks advanced, 52% declined, and 3% remained unchanged as investors continued shifting capital toward AI and semiconductor-related equities in 2026.

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