Japanese Shares Hit New All-Time Highs

Asian equity markets climbed to new record highs on Wednesday following a tech-led rally on Wall Street overnight, with stocks in Japan and South Korea leading regional gains. Renewed optimism surrounding artificial intelligence and related technologies continued to drive the market higher. Investors were also cautiously optimistic that the US and Iran could strike a peace deal despite fresh hostilities in the Middle East.

The Nikkei 225 Index jumped 1.3% to above 65,800 while the broader Topix Index gained 0.3% to 3,950 on Wednesday, with Japanese shares scaling fresh record highs and tracking a tech-led rally on Wall Street overnight. Investor sentiment was also supported by cautious optimism that the US and Iran could still reach a peace agreement despite renewed hostilities in the Middle East. Domestic shares further benefited from easing US Treasury yields, as markets scaled back expectations for near-term interest rate hikes from the Federal Reserve. Technology stocks led the advance, with strong gains from Kioxia Holdings (2.1%), Fujikura (2.4%), Advantest (5.3%), Tokyo Electron (3.8%) and Lasertec (2.5%). In contrast, financial shares lagged behind, pressured by declines in Mitsubishi UFJ (-1.1%), Sumitomo Mitsui (-1.7%) and Mizuho Financial (-2.2%).

The Nikkei 225 Index fell 0.25% to close at 64,996 while the broader Topix Index lost 0.1% to 3,938 on Tuesday, with both benchmarks easing from record highs as investors locked in profits while monitoring the latest developments in the Middle East. The US military reportedly targeted missile launch sites and vessels suspected of attempting to deploy mines in southern Iran, although President Donald Trump said talks with Tehran were progressing well. On the domestic front, Bank of Japan Deputy Governor Ryozo Himino said the central bank remains committed to further interest-rate hikes, though the timing and pace would depend on how the Middle East conflict affects Japan’s economy and inflation outlook. Technology and artificial intelligence-related stocks retreated after leading Monday’s rally, with losses from Kioxia Holdings (-4.6%), Fujikura (-4%), and Advantest (-6.1%). In contrast, SoftBank Group surged another 10.9% and is now up more than 50% over the past four sessions.