TOKYO - The Nikkei Stock Average surpassed 50,000 yen for the first time in history following the launch of the Takaichi administration, with the surge driven primarily by just a handful of AI-related stocks. But as share prices swing wildly, questions are growing over whether this market euphoria is truly sustainable.
AI has become an indispensable tool for many people in both work and daily life. One café employee said they sometimes ask AI for daily plans when they have nothing to do, while a university student said they use it once a day to get advice on writing a novel. A company employee added that AI helps them quickly generate cost estimates for projects.
That rising reliance on AI is now reflected in Japan’s stock market. At the end of October, the Nikkei broke through the 50,000-yen barrier for the first time, at one point climbing more than 600 yen in a single morning before dropping nearly 900 yen later in the day, eventually closing at 50,842 yen.
Much of that volatility stems from just a few AI-linked companies. One of them is SoftBank Group, led by Masayoshi Son. In October, the Nikkei’s historic monthly gain of 7,478 yen included about 1,700 yen attributable to SoftBank’s share rise, as the group aggressively expands its AI investments. CFO Yoshimitsu Goto said the company is determined not to miss any investment opportunities in the AI field.
SoftBank is also constructing a large-scale data center in Tomakomai, Hokkaido, designed to process massive AI workloads. The cool climate reduces air-conditioning costs, and the area is less prone to natural disasters. The facility is expected to open in fiscal 2026.
Other key contributors include Advantest, Tokyo Electron, and Fujikura. Together with SoftBank, these four companies lifted the Nikkei by nearly 5,000 yen in just one month. Telecommunications giant KDDI is also preparing to launch full operations of a new data center in Sakai, Osaka, in January 2026. Covering about 33,000 square meters, it will feature extensive power facilities and water-based cooling systems consuming several thousand liters a day. The site was previously a Sharp LCD plant, allowing KDDI to repurpose existing infrastructure and begin full-scale operations within just six months.
Experts say such facilities are becoming essential as the computing demands of generative AI skyrocket. University of Tokyo Professor Hiroshi Ezaki noted that the scale of data centers now required is “extraordinarily large.”
However, as the Nikkei’s surge continues, some observers warn of an “AI stock bubble.” Commentator and novelist Jin Mayama said Japan’s market—roughly one-hundredth the size of the U.S.—offers easy profit opportunities for foreign investors with large funds. Once AI stocks are hyped as strong buys, ordinary investors rush in, pushing prices higher until early movers sell off for massive one-day gains. Mayama argued that because stock prices are rising far faster than corporate earnings or real economic growth, the market is indeed showing signs of a bubble.
Source: TBS
