Japan’s Nikkei share average experienced an increase of over three percent on Wednesday, driven by a surge in AI-related stocks that mirrored the performance of their US counterparts. Additionally, investors capitalised on stocks that exhibited a robust outlook. The Nikkei increased by 3.16 percent, reaching 65,979.02, while the broader Topix experienced a rise of 1.52 percent, settling at 4,022.18 as of 0101. The S&P 500 and the Dow reached unprecedented levels on Tuesday, driven by the most recent earnings reports from AI-focused firms like Caterpillar and Palantir, which alleviated concerns regarding demand. Concurrently, crude oil prices and Treasury yields experienced a decline amid optimism surrounding a potential resolution in the Iran conflict.

Chip-testing equipment maker Advantest and chip-making equipment maker Tokyo Electron experienced increases of 8 percent and 4 percent, respectively, in alignment with the Philadelphia Semiconductor index’s 6.6 percent rise overnight. The US chip index experienced an increase for the fourth consecutive session following a significant decline of 20.6 percent in July. Murata Manufacturing, a prominent producer of multi-layer ceramic capacitors essential for power regulation in AI servers, experienced an increase of 8.33 percent following an upward revision of its annual net profit forecast.

“Compared with the past, more companies raised their annual outlook in the first quarter, which means they had made modest forecasts due to the impact of the Middle East war,” said Daisuke Hashizume. “A series of upward revisions of forecasts of Japanese firms is a positive factor for overall equities,” he said. A series of upward revisions of forecasts of Japanese firms is a positive factor for overall equities,” he stated. Fanuc experienced an increase of 3.67 percent following the company’s upward revision of its annual net profit forecast. Bank shares experienced an uptick, as Mitsubishi UFJ Financial Group and Mizuho Financial Group both increased by over one percent.

Bucking the trend, Uniqlo-brand owner Fast Retailing experienced a decline of 1.82 percent, exerting the most significant downward pressure on the Nikkei. Air-conditioning manufacturer Daikin Industries experienced a decline of 8 percent, marking the largest percentage loss on the Nikkei. Among the over 1,500 stocks listed on the prime market of the Tokyo Stock Exchange, 67 percent experienced an increase, 29 percent saw a decline, and 3 percent remained unchanged.