TOKYO - Japanese stocks rose for a second straight session on Friday, July 10, with the Nikkei Stock Average climbing 813.88 points to close at 68,557.73 after strong gains in U.S. technology and semiconductor stocks fueled renewed buying of AI-related shares.
The Nikkei at one point surged more than 1,600 points and briefly reclaimed the 69,000 level before profit-taking trimmed gains later in the session. The TOPIX also finished higher, although its increase was limited to 0.3%.
AI-related semiconductor stocks led the advance. SoftBank Group rebounded sharply for the first time in six trading days, rising about 11%, while Sumitomo Electric Industries gained around 7%. Ibiden and Disco also posted solid gains of roughly 3%.
Investor sentiment improved after semiconductor stocks rallied broadly in the United States. Micron Technology climbed 4.5%, AMD gained more than 5%, and disk drive maker Seagate Technology jumped 7.5%. The market was also encouraged by strong demand for SK Hynix's planned U.S. ADR listing, with reports indicating subscriptions exceeded seven times the shares on offer in a deal valued at about $26.5 billion.
Micron also announced plans to invest up to $3 billion to strengthen semiconductor production in the United States, reinforcing expectations that AI-related capital investment will remain strong.
South Korea's stock market also provided support, with the KOSPI rising about 2.9%, adding to optimism across Asian semiconductor shares.
Japanese equities received an additional boost after Finance Minister Katayama said the government would pursue measures encouraging public pension funds, including the Government Pension Investment Fund (GPIF), to increase investment in Japanese financial assets.
The comments fueled speculation that the GPIF, which managed approximately 293 trillion yen in assets at the end of fiscal 2025, could raise its allocation to domestic assets. The fund currently allocates about one-quarter of its portfolio each to domestic equities, domestic bonds, foreign equities, and foreign bonds. Even a one-percentage-point portfolio adjustment would represent roughly 3 trillion yen in investment.
The remarks also pushed long-term Japanese government bond yields lower, with the 10-year yield falling to around 2.76% during trading.
Despite the Nikkei's strong gain, market breadth was more balanced than the headline index suggested. On the Tokyo Stock Exchange Prime Market, 801 stocks advanced while 705 declined.
Retail shares underperformed after recent gains. Fast Retailing fell more than 3% despite raising its earnings forecast. The Uniqlo operator now expects net profit for the fiscal year ending August 2026 to rise 15% to 500 billion yen, citing continued strength in its overseas business. Investors nevertheless locked in profits after the stock had risen roughly 50% since the start of the year, while buying shifted toward AI-related semiconductor names.
Seven & i Holdings also declined despite revising its earnings outlook higher. Investors questioned the sustainability of stronger gasoline-related profits, which were supported by higher crude oil prices.
Attention also turned to Aeon, which was scheduled to release earnings after the market closed. Analysts noted that inflation concerns have weighed more heavily on general retailers than department stores, with companies such as Isetan Mitsukoshi Holdings continuing to outperform thanks to resilient spending by affluent consumers and inbound tourism.
In Taiwan, TSMC postponed the release of its monthly sales figures until July 13 because of the impact of a typhoon.
Trading value on the Tokyo Stock Exchange Prime Market totaled 8.97 trillion yen. Although the Nikkei finished sharply higher, the afternoon rally lost momentum as selling linked to ETF distribution payments and weakness in memory chip maker Kioxia offset part of the day's earlier gains. Investors will now watch the performance of SK Hynix's U.S. ADR debut and movements in U.S. semiconductor stocks for further direction.
Source: CNBC
