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Japanese stocks surge as markets reopen after a holiday break, with investors catching up with the global equities rally driven by optimism the US and Iran were nearing a deal to end their conflict.
The tech-heavy Nikkei 225 Stock Average advanced as much as 4% to 61,902.23. The broader Topix Index rose as much as 2.1% to 3,806.81. Oil steadied after plunging 7% in the previous session.
This comes as Japanese equities have been gaining on strong earnings from tech firms. The Nikkei topped the key psychological level of 60,000 last month on that rally.
Japanese stocks surged as investors reacted to optimism that the US and Iran were nearing a deal to end their conflict, and also benefited from gains in tech stocks.
Hopes of a US-Iran deal led to a significant drop in oil prices, with Brent crude falling sharply as the potential reopening of the Strait of Hormuz was anticipated.
Semiconductor and fiber-optic-related sectors are leading the gains in Japanese stocks, boosted by strong earnings from tech firms like Advanced Micro Devices (AMD) and memory chipmaker Kioxia.
The Strait of Hormuz is a critical waterway for energy supplies. Its potential reopening due to a US-Iran agreement could restore the free flow of oil and ease inflationary pressures.
The Japanese yen saw a significant jump against the dollar, renewing speculation of official intervention from Tokyo amid broader market optimism and a weaker dollar.
“Japanese stocks are expected to rise, led by semiconductor and fiber-optic-related sectors, amid strength in overseas markets,” said Takashi Ito, senior strategist at Nomura Securities. “Lower oil prices are significant for companies, as even a modest easing of inflation can provide meaningful relief.”
US stocks hit new highs Wednesday after Washington was said to present a memorandum of understanding that would gradually reopen the Strait of Hormuz and lift the blockade on ports.
Tech shares are also supporting the market in Tokyo after US chipmaker Advanced Micro Devices Inc. rallied on bullish results. Memory chipmaker Kioxia’s shares are set to rise by their daily limit while semiconductor related companies such as Renesas Electronics Corp and Ibiden Co. were some of the top performers on the Nikkei 225 on Thursday.
A stronger yen meanwhile may weigh on some export-related shares. The currency surged as much as 1.8% against the dollar on Wednesday, renewing speculation of intervention.
This article was generated from an automated news agency feed without modifications to text.
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