News On Japan

Nikkei Soars by Record 3,320, Closes Above 62,000 for First Time

TOKYO - The Nikkei 225 surged sharply in Tokyo trading on May 7th, rising more than 3,300 points to close at 62,833.84 yen, marking both the largest gain in its history and the first time the index has finished in the 62,000 range, as buying orders spread rapidly from the opening bell following the Golden Week holidays and continued to build throughout the session.

The rally was driven primarily by strong demand for semiconductor and AI-related stocks, with investors responding to gains in overseas markets during the holiday period and positioning for further expansion in artificial intelligence investment, while easing concerns over geopolitical tensions involving Iran also supported risk appetite.

The scale and speed of the advance were notable, surpassing the previous record rise of 3,217 yen recorded during the rebound from the August 2024 sell-off known as the “Reiwa-era Black Monday,” highlighting how quickly sentiment has shifted back toward equities after a period of caution, although some market participants warned that the pace of gains may be too rapid and that further upside will depend on whether current momentum can be sustained.

This sharp move in Tokyo reflects a broader pattern seen across global markets over the past week, where falling oil prices and reduced geopolitical risk have triggered a widespread return to risk assets, particularly in technology sectors tied to artificial intelligence.

In the United States, major indices pushed higher with gains concentrated in semiconductor and AI infrastructure companies, as investors resumed positioning around data centers, chip demand, and cloud expansion, while European markets also advanced on expectations of lower energy costs, supporting industrial and consumer-facing sectors.

Elsewhere in Asia, markets such as South Korea and Taiwan recorded solid gains, driven by their exposure to the global semiconductor supply chain, reinforcing a trend in which a relatively small group of technology stocks is accounting for a significant share of market performance worldwide.

Despite the strength of the rally, caution is emerging among investors, as the speed of the rise and the concentration of gains in AI-related sectors raise concerns about overheating, particularly as markets appear to be pricing in a sustained easing of geopolitical tensions that is not yet certain, leaving global equities vulnerable to any reversal in either the Middle East situation or the momentum behind the AI-driven investment cycle.

Source: TBS

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