Japan’s Nikkei share average experienced a notable increase on Thursday, following U.S. actions aimed at stabilising its bond market, which in turn bolstered investor sentiment and heightened demand for riskier assets. The Nikkei 225 advanced 1.36% to close at 66,216.79. The broader Topix experienced an increase of 1.18%, reaching a level of 4,059.73. Long-term borrowing costs from the U.S. to Germany and Japan reached their highest levels in decades earlier this week, reflecting apprehensions regarding escalating government debt and inflation.

The U.S. Treasury announced overnight it will double buyback sizes for long-duration debt, prompting a sharp decline in U.S. yields that also spread to Japan. “The fall in interest rates is undoubtedly the key factor driving the market today,” stated Wataru Akiyama. “It is notable that shares and sectors which had previously lagged behind the rise in AI and semiconductor-related stocks are now showing significant gains.” Breadth exhibited a markedly positive trend, with 182 of the 225 names advancing, 42 declining, and one remaining unchanged.

The largest percentage gainers in the index included Sumitomo Metal Mining, which increased by 10.76%, followed by Sumitomo Pharma, rising by 8.48%, and Kansai Electric Power, which experienced a gain of 8.37%, representing its most significant one-day increase since August 2024. The largest declines were observed in Aozora Bank, which fell by 3.11%, followed by Ibiden with a decrease of 2.87%, and Nippon Steel, which saw a drop of 2.20%.