Japan’s Nikkei share average increased by 2% on Monday, achieving its highest closing level in almost four weeks. This uptick was primarily driven by stocks associated with AI and semiconductors, following a rally on Wall Street the previous Friday. However, concerns regarding the situation in the Middle East tempered broader market gains. The Nikkei climbed 2.08% to 66,970.22, marking its highest close since July 15. The broader Topix rose 0.63% to 4,100.61.
“Gains of chip-related stocks supported the Nikkei. Easing bets for a U.S. Federal Reserve rate hike were the driver,” said Daisuke Hashizume. U.S. stocks experienced an upward trajectory on Friday, culminating in the S&P reaching a record high, thereby concluding a robust week of gains across the major indexes. This movement followed the release of data indicating an unexpected decline in U.S. employment last month, which subsequently tempered anticipations regarding a potential interest rate hike by the Federal Reserve in its upcoming September meeting.
In the Middle East, uncertainty persists regarding the reopening of the Strait of Hormuz, as Iran announced that negotiations with Oman to establish new shipping lanes are nearing completion; however, the U.S. must fulfilll additional prerequisites. In Japan, chip-related companies Advantest and Tokyo Electron experienced increases of 6.43% and 4.13%, respectively. Fujikura experienced a notable increase of 7.62%, continuing a significant upward trend following the company’s revision of its annual net profit forecast announced on Friday. Ibiden, a supplier to AI bellwether Nvidia, experienced an increase of 4.03%.
Recruit Holdings surged 22.79% to reach a daily limit high of 16,165 following the staffing agency’s revised annual forecasts, which exceeded market expectations. Investors refrained from engaging in active trading as Japan observes the “obon” summer holidays. As the week progresses, the primary indexes are expected to exhibit minimal direction due to a lack of significant market-moving indicators, according to Daiwa’s Hashizume. Fast Retailing, the owner of the Uniqlo brand, experienced a decline of 0.74%.