Japan’s Nikkei share average closed at a record high for a third consecutive session on Wednesday, finishing just below the 70,000 threshold, as concerns over the Middle East conflict eased and sustained buying in AI-related shares continued in anticipation of the U.S. Federal Reserve’s policy decision. The Nikkei rose 0.7% to close at 69,902.25 after touching an intraday high of 70,125.75. The broader Topix climbed 0.6% to 4,013.23.
Details of a U.S.-Iran interim agreement aimed at resolving the ongoing conflict are coming to light, with President Donald Trump asserting that it would preclude the development of a nuclear weapon by Tehran. Additionally, a U.S. official indicated that the agreement would permit Iran to resume oil sales upon its signing. Oil prices have softened, continuing the downward trend observed in the prior session as investors evaluate the implications of the U.S.-Iran peace agreement. “With worries regarding geopolitical risk diminishing since yesterday, the market appears to be experiencing some buying activity fuelled by anticipations of increasing demand for AI, especially in specific sectors like high-priced semiconductor shares and other AI-related equities,” stated Maki Sawada.
Market breadth exhibited robustness, with 137 stocks advancing compared to 85 decliners in the Nikkei. AI-related shares exhibited robust performance, highlighted by chip inspection equipment manufacturer Lasertec 6920, which surged 13.2% to reach a record high. Electronic components manufacturer Murata Manufacturing experienced a rise of 3.2%, while industrial robotics producer Yaskawa Electric saw an increase of 2.9%. The largest percentage declines were observed in life insurance group T&D Holdings, which decreased by 3.2%. This was followed by tech investment conglomerate SoftBank Group, which saw a decline of 3.1%, and medical endoscopes and optics company Olympus, which experienced a drop of 3%.
The Nikkei briefly crossed the 70,000 mark for the first time on Tuesday following the Bank of Japan’s widely anticipated interest rate increase to 1.00%. Investors will pay close attention to new Fed Chair Kevin Warsh’s remarks regarding inflation, unemployment, and the economic outlook during his inaugural post-Federal Open Market Committee press conference later today. The Fed is widely anticipated to maintain interest rates at their current levels.