TOKYO - Tokyo stocks rose on September 24, with the Nikkei 225 climbing to 65,647, up 628 points, as investors returned from the Silver Week break with renewed appetite for artificial intelligence and semiconductor-related shares, while the broader TOPIX edged lower as value and financial stocks came under pressure.
The session marked the first full cash trading day since September 18, when the Bank of Japan raised its policy rate to 1.25%. During Japan’s five-day market break, U.S. technology shares advanced strongly, with the Nasdaq Composite rising and the Philadelphia Semiconductor Index jumping more than 8%, giving Tokyo’s chip-related shares a powerful lead.
The Nikkei opened sharply higher at 65,476 and quickly moved above 66,000, rising more than 1,200 points at one stage to 66,249. The early surge lost momentum later in the day as investors took profits near technical resistance, but the index still ended firmly higher and extended its recovery from mid-September lows.
The broader TOPIX was much weaker than the Nikkei, slipping to around 4,084. The contrast showed that the day’s rally was driven mainly by high-priced Nikkei components and semiconductor-related shares, rather than a broad advance across the Tokyo market.
The divergence between the Nikkei and TOPIX was one of the most important features of the session. Investors bought AI, chip equipment, electronic components, optical-fiber and data-center infrastructure shares, while selling appeared in banks, insurers, trading houses, utilities and other value-oriented names.
Nikkei CNBC-style market commentary would likely focus on the powerful but narrow nature of the rally. The headline index looked strong because AI and semiconductor stocks rose sharply, but the broader market was far less convincing.
Advantest and Tokyo Electron were the main drivers of the Nikkei. The two stocks alone accounted for a large share of the index’s gain, reflecting their heavy weighting and direct exposure to the global AI semiconductor cycle.
Advantest remains one of Japan’s clearest beneficiaries of demand for advanced chip testing. Its shares tend to move strongly when investors become more confident about AI processors, high-performance computing and the global semiconductor investment cycle.
Tokyo Electron also rose strongly, supported by the rebound in U.S. semiconductor stocks during Japan’s holiday break. The company remains central to Japan’s role in semiconductor manufacturing equipment and is one of the most closely watched gauges of chip-sector sentiment.
SoftBank Group was also in focus. The stock was supported by strength in Arm and by continued attention to the group’s financing plans linked to artificial intelligence investment. SoftBank remains Tokyo’s most visible proxy for global AI investment because of its exposure to OpenAI, Arm, robotics, digital infrastructure and other technology platforms.
Kioxia Holdings was another key name. The memory-chip maker remains a barometer for confidence in high-bandwidth memory, AI servers and data-center storage demand. Its share price has been volatile since July, but renewed global semiconductor buying helped support the stock.
Ibiden, Sumitomo Electric, Fujikura, Furukawa Electric, Murata Manufacturing, TDK, Taiyo Yuden, Lasertec, Kokusai Electric and Socionext were also closely watched. These companies represent advanced chip substrates, optical fiber, cables, electronic components, power systems, semiconductor equipment and data-center infrastructure.
The September 24 rally showed that investors still believe the AI investment cycle remains intact. Demand for chips, memory, networks, power systems and data-center equipment continues to support Japanese suppliers across several layers of the technology chain.
However, the market is no longer treating every AI-related stock as a simple buy. Investors are still watching valuation, regulation, energy demand, funding costs, supply constraints and the debate over whether AI development should slow for safety reasons.
That selectivity was visible in the weakness of some software and service-related names. Nomura Research Institute and Recruit Holdings were pressured by the view that advances in AI agents could eventually challenge parts of their business models, even while hardware and infrastructure names rallied.
The session also showed how much the Japanese market had to absorb after the holiday break. While Tokyo was closed, U.S. technology stocks gained, oil prices fell, the yen remained weak, and global bond markets stayed volatile. Investors had to price all of those developments into Japanese shares at once.
Lower oil prices helped overall sentiment. During the break, crude prices fell sharply as fears over immediate supply disruption eased and hopes grew for progress in U.S.-Iran and trade-related talks. Brent remained elevated by normal standards, but the retreat from recent highs reduced inflation pressure.
For Japan, lower oil is especially important because the country imports most of its energy. Cheaper crude reduces pressure on gasoline, electricity, aviation fuel, shipping, logistics, chemicals and manufacturing.
Even so, energy remains a major risk. Oil is still high enough to weigh on households and companies, and any renewed disruption around the Strait of Hormuz, the Red Sea or Saudi infrastructure could quickly revive inflation concerns.
The yen traded near the 158 range against the dollar during the session, staying weak even after the BOJ’s September 18 rate hike. The currency’s weakness supported exporters and helped the Nikkei, but it also kept intervention and imported-inflation risks alive.
The BOJ raised its policy rate from 1% to 1.25% last week, the highest level in 31 years. The move had been expected, and the yen weakened afterward because the decision included two dissenting votes and lacked a strongly hawkish signal for another quick hike.
The market’s interpretation was clear: the BOJ tightened, but not enough to convince traders that the rate gap with the United States will close quickly. That left the yen vulnerable, especially after the Federal Reserve also raised rates and signaled the possibility of further tightening.
For exporters, the weaker yen is supportive. Automakers, machinery makers, electronic-component suppliers and precision-equipment companies benefit when overseas earnings translate into more yen.
For households and importers, the weaker yen is a problem. It raises the cost of imported food, energy, raw materials and consumer goods, especially when oil prices remain high by historical standards.
That makes the yen one of the most important variables for the Japanese economy. A move toward 160 would support exporters but revive intervention concerns and household inflation pressure. A rebound toward 153 would ease import costs but could weigh on exporters and carry trades.
Finance Ministry and BOJ officials remain under pressure to prevent disorderly currency moves. Earlier this month, reports of rate checks signaled that authorities were watching yen weakness closely. Traders remain alert to the possibility of renewed intervention if the yen weakens too far or too quickly.
Japanese government bond yields also remained important. The BOJ’s rate hike took effect as Tokyo reopened, but shorter-term yields had already eased after investors judged the central bank’s message as less aggressive than feared.
The 10-year JGB yield remains near historically high levels after recently moving above 3% for the first time since 1996. Super-long yields also remain elevated, reflecting concerns over inflation, fiscal policy and long-term government financing costs.
Higher yields support banks and insurers by improving lending margins and investment income, but they can hurt growth shares by raising the discount rate applied to future earnings. They also increase the government’s debt-servicing burden.
On September 24, financial shares weakened despite the higher-rate environment. Mega-banks and insurers came under pressure as investors took profits and reassessed whether the BOJ will move quickly enough to justify further gains in rate-sensitive stocks.
This was a reversal from earlier in September, when banks had attracted strong buying on expectations for a sustained BOJ tightening cycle. The latest trading suggested that investors now see a slower or more uncertain path after the 7-2 BOJ vote.
Trading houses and high-dividend value shares also weakened. Itochu, Mitsubishi Corp., Mitsui & Co. and other value-oriented names faced selling as investors rotated back into AI and semiconductor growth stocks.
Utilities and other yield-sensitive defensive shares were also under pressure. In a market led by AI and chip names, investors appeared less interested in defensive income plays, especially as bond yields remained elevated.
Honda was a bright spot among exporters after reports that the company would accelerate mass production of next-generation hybrid vehicles in North America. The stock reached a year-to-date high, reflecting investor confidence in hybrid demand and the company’s North American strategy.
The auto sector remains sensitive to the yen, tariffs, U.S. consumer demand and the transition between hybrid and electric vehicles. Honda’s move showed that investors continue to reward companies with clear product strategies in key overseas markets.
Medical wholesaler Medipal Holdings also reached a record high, showing that stock-specific buying remained active even in a market dominated by AI and semiconductor headlines.
On the negative side, Advance Create fell after investors reacted to expectations of another annual loss. The move showed that weak earnings guidance continues to be punished sharply, even on a day when the Nikkei rose.
The Growth Market 250 Index rose slightly, supported by active buying in selected smaller names. TIER IV, Timee and Datasection attracted buying, while Oncolys BioPharma, PowerX and ZenmuTech declined.
The mixed performance in growth stocks reflected the broader market mood. Investors are willing to buy themes linked to AI, data, mobility and labor platforms, but higher interest rates still make smaller growth companies vulnerable.
The international backdrop was mixed. Reuters reported that Asian equities were uneven as investors weighed Middle East tensions, bond-market volatility and the possibility of talks between the United States and China. The MSCI Asia ex-Japan index fell, while Japanese shares outperformed because Tokyo was catching up to the U.S. technology rally.
Debt markets remained unsettled. Japanese bonds followed Treasuries lower at times, showing that global investors are still concerned about inflation, central-bank tightening and government borrowing.
U.S. jobless claims data were also in focus. Investors were watching whether the U.S. labor market would show enough weakness to reduce expectations for additional Federal Reserve tightening. Stronger labor data would support the dollar and keep pressure on global yields.
The U.S.-China relationship also returned to focus. Reports of a possible extension of a U.S.-China trade agreement deadline helped ease some concerns in Asian markets, although uncertainty remains high.
For Japan, U.S.-China tensions matter because Japanese companies are deeply connected to regional supply chains, semiconductor equipment, autos, machinery and industrial components. A calmer trade environment supports risk appetite, while renewed friction can quickly pressure exporters and technology shares.
The BOJ’s rate hike remains the central domestic policy story. A 1.25% policy rate is a major shift for Japan after decades of ultra-low interest rates, but markets are more focused on whether the central bank will raise rates again in December or early 2027.
Governor Kazuo Ueda’s message after the September decision was seen as measured rather than forcefully hawkish. That helped equities and bonds, but it weakened the yen and raised doubts about whether the BOJ is moving fast enough to contain imported inflation.
The central bank faces a difficult balance. If it signals more rate hikes, the yen could strengthen and inflation pressure could ease, but yields may rise and pressure stocks, mortgages, corporate borrowing and government finances. If it moves too slowly, the yen could weaken and imported inflation could return.
For households, the balance matters directly. Higher interest rates can raise borrowing costs, while yen weakness and high energy prices can push up food, gasoline, electricity, transport and services.
Wage growth has improved, but consumers remain sensitive to everyday costs. The BOJ wants a sustainable wage-price cycle, but households still judge the economy by whether wage increases cover rising expenses.
For companies, the question is whether higher wages, energy costs, logistics expenses and borrowing costs can be passed on to customers. Firms with pricing power, strong brands, stable demand or exposure to long-term investment are better positioned.
Companies without pricing power face greater risk. If the yen weakens, rates rise and consumers resist price increases, margins could come under pressure even if nominal sales grow.
Prime Minister Sanae Takaichi’s government also faces a difficult policy mix. It is trying to support households, expand defense spending and fund long-term strategic investment while bond yields and debt-servicing costs are rising.
The government’s growth strategy calls for large-scale public and private investment through fiscal 2040 in semiconductors, artificial intelligence, energy security, defense, shipbuilding, robotics, space and other strategic sectors.
Those priorities support many of the companies investors bought on September 24, including chip-equipment makers, materials suppliers, optical-network companies, data-center infrastructure firms and advanced manufacturers.
However, higher interest rates make fiscal discipline more important. Investors want evidence that Japan can fund household support and industrial policy without undermining confidence in public finances.
The September 24 session showed that investors remain willing to buy Japan’s strategic growth themes, especially AI and semiconductors. But the TOPIX decline showed that confidence is not broad-based.
The Nikkei’s technical picture improved as it held above 65,000 and briefly topped 66,000, but profit-taking near the highs showed that resistance remains. The 66,000 area is now an important short-term level for investors to watch.
The 25-day moving average around the mid-65,000 range had been viewed as a resistance point before the session. The Nikkei’s ability to trade above it was positive, but the late fade suggested that the market still needs stronger breadth to build a durable rally.
TOPIX’s weakness remains a warning sign. A healthy rally usually includes broader participation from banks, trading houses, autos, services, retailers and domestic-demand shares. On September 24, the market was more dependent on chip and AI names.
What to watch next: whether the Nikkei can hold above 65,000 and make another attempt at 66,000, whether TOPIX can recover from its weak close, and whether AI-related buying broadens beyond a small group of high-impact stocks.
Investors will monitor Advantest, Tokyo Electron, SoftBank Group, Kioxia, Ibiden, Fujikura, Furukawa Electric, Murata Manufacturing, TDK, Taiyo Yuden and Lasertec for signs of whether the AI rebound has staying power.
The yen near 158 to the dollar remains the most important domestic signal. Further weakness would support exporters but revive inflation and intervention concerns. A rebound toward 153 would ease import costs but pressure exporters and carry trades.
Oil prices remain another key factor. Lower crude helped sentiment during the holiday break, but energy costs are still high enough to affect households, companies and the trade balance.
JGB yields will also remain critical. A stable bond market would support equities, while another rise in 10-year or super-long yields would pressure valuations and fiscal policy.
Other key factors will be U.S. jobless claims, Fed guidance, U.S.-China talks, Middle East shipping risks, South Korean semiconductor shares, Japan’s next inflation data and any renewed comments from Japanese authorities on currency stability.
September 24 showed that Tokyo’s AI and semiconductor trade remains powerful enough to lift the Nikkei sharply after a long holiday break. But the split between a strong Nikkei and a weak TOPIX also showed that the rally remains narrow. Japan’s market is still caught between the promise of AI-driven growth and the pressure of a weak yen, high rates, fiscal strain and uneven household conditions.
Source: CNBC
