Global Market: Japan’s Nikkei jumps over 1% as tech rally on Wall Street lifts sentiment

The benchmark Nikkei 225 climbed 1.34% to 64,117.58 in morning trade, while the broader Topix index gained 0.39% to 4,012.81.

According to Reuters, the S&P 500 rose 0.60% and the Nasdaq Composite advanced 1.18% on Tuesday, led by technology shares, while energy stocks lagged.

Semiconductor-related stocks were among the biggest gainers in Tokyo. Disco rose 3.67%, while Screen Holdings gained 3.46%, benefiting from the positive sentiment surrounding US technology shares.

Mitsui Kinzoku advanced 3.87%, making it the Nikkei’s top percentage gainer, followed by Shin-Etsu Chemical, which climbed 3.78%.

Investors were also focused on the Federal Open Market Committee’s (FOMC) policy decision due later on Wednesday. Markets were pricing in a hold on interest rates, alongside a high probability of a rate hike in December.

Corporate developments in the artificial intelligence sector remained in focus after Meta Platforms increased its equity fundraising to $97.5 billion to finance its AI expansion. Nvidia and Advanced Micro Devices committed $3 billion and $1 billion, respectively, to the offering, Reuters reported.

Takayuki Miyajima, senior economist at Sony Financial Group, said in a note that Japanese AI and semiconductor stocks could benefit from the previous session’s gains in US technology shares. However, investors were likely to adopt a cautious approach ahead of the Fed’s decision and earnings announcements from major Japanese and US companies, Reuters reported.

Crude oil prices declined overnight, although the US-Israeli war with Iran and security risks around the Strait of Hormuz remained key concerns for investors amid uncertainty overglobal energy supplies.

Market breadth on the Nikkei 225 was relatively balanced, with 109 stocks advancing against 93 decliners.

Among the biggest losers, Konami Group fell 3.51%, Asahi Group Holdings declined 2.75%, and Idemitsu Kosan dropped 2.32%, according to Reuters.

Investors will continue to monitor the Fed’s policy outlook, corporate earnings and geopolitical developments for further direction in Japanese equities.