Nikkei Surges to Two-Week High Driven by Tech Stocks and Yen Strength
The Nikkei stock average surged to a level not seen in over two weeks, driven by strong momentum in technology stocks and a depreciation in the value of the yen. This boosted investor confidence across the board.During the midday session, the Nikkei soared by 1.71% to reach 36,738.42 points, hitting 36,741.87 at one point. This level had not been observed since January 23, when the index reached a three-decade high.
SoftBank Group, a prominent investor in AI-focused startups, witnessed a substantial surge of 9.69% in its stock value. This was propelled by positive forecasts from its key holding, Arm.
Advantest, a manufacturer of chip-testing equipment and a supplier to Nvidia, also experienced a robust increase of 7.08%. Additionally, the Philadelphia SE Semiconductor Index outperformed Wall Street’s main indexes, rising by 1.62% overnight.
The broader Topix index showed a moderate increase of 0.46%. Notably, the Topix index of growth shares surged by 0.78%, surpassing the 0.15% rise seen in value shares.
The depreciation of the yen further fueled advances in the Japanese stock market. The currency depreciated by up to 0.3% against the dollar, partly due to remarks made by Bank of Japan Deputy Governor Shinichi Uchida, suggesting caution regarding aggressive tightening post-negative interest rate policy exit.
A depreciating currency is beneficial for exporters, as it increases the value of foreign earnings and enhances the competitiveness of their products in international markets.Toyota Motor continued its upward trajectory, reaching a historic peak with a 4% increase in its stock value. This surge followed impressive earnings results.
Kenji Abe, an equity strategist at Daiwa Securities, commented that Toyota’s emphasis on hybrid cars is resonating with investors. He anticipates the Nikkei to reach 37,000 by the end of March, driven by robust earnings across various sectors.
As the reporting season approaches its peak next Wednesday, financial results continue to highlight both significant winners and losers in the market.In contrast to the overall positive trend, Suzuki Motor witnessed a decline of 7.34% due to disappointing earnings. Similarly, internet company DeNA experienced a significant downturn, with its stock value dropping by 12.17% on the Nikkei.Conversely, pharmaceutical firm Kyowa Kirin saw a notable surge of 18.14% after announcing a share buyback, demonstrating the market’s positive response to such initiatives.
Overall, the Nikkei’s surge to a two-week high reflects the strong performance of technology stocks and the positive impact of a depreciating yen on investor sentiment. However, the market continues to experience fluctuations, with some sectors outperforming others based on their financial performance and strategic initiatives.
