Nikkei Hits Record High, Corporate Earnings and AI Stocks Drive Rally
The Nikkei 225 index hit a new record high on Thursday, rising 0.8% to trade above 63,700, supported by a solid earnings season and more optimistic guidance. Continued demand for artificial intelligence (AI) stocks also boosted sentiment and sustained the rally in Japanese equities.
The Japanese market's gains also followed the rally in technology stocks on Wall Street in the previous session. However, the global landscape remains complex after accelerating US inflation rekindled concerns that the Federal Reserve could still consider additional interest rate hikes, a factor that typically increases volatility in risk assets.
On the geopolitical-economic front, market attention remains focused on the meeting between US President Donald Trump and Chinese President Xi Jinping, with discussions expected to prioritize trade relations. Expectations regarding the direction of trade policy are a key factor influencing regional sentiment, particularly for sectors sensitive to supply chains and global demand.
At the stock level, gains were led by Kioxia Holdings (+1.7%), Furukawa Electric (+1.5%), Advantest (+2.8%), Fanuc (+10.4%), and Resonac Holdings (+15.6%). The performance of technology and precision manufacturing stocks reaffirmed the narrative of a shift in interest to segments linked to AI spending and profit growth expectations.
Conversely, Mitsui Kinzoku fell 11.8% after releasing a weaker profit projection for FY2027 despite forecasting higher sales. The market tends to punish issuers that lower their profitability outlook, indicating investor sensitivity to the quality of guidance amid global interest rate uncertainty.
Going forward, the index's direction will be determined by the consistency of Japan's corporate earnings outlook, the continued shift into technology/AI stocks, and the market's response to the combination of US inflation, Fed policy expectations, and the outcome of the Trump-Xi communication, which could potentially influence regional risk sentiment. (asd)*
Source: Newsmaker.id
