According to the Nihon Keizai Shimbun (Nikkei), the Nikkei closed at 69,317.50, up 3,297.46 points or 4.99% from the previous trading day, marking the second-largest increase in history.
The broader TOPIX index also reached a record high, climbing to 4,027.15 during the day before finishing at 3,999.60, a rise of 3.03% from the prior session.
Analysts attributed the market's rally to reduced geopolitical risks following the U.S.-Iran agreement, which spurred buying across a wide range of sectors, particularly in artificial intelligence (AI) and semiconductor stocks.
The easing of geopolitical tensions accelerated the AI rally, with Tokyo Electron briefly rising 10% to reach an all-time high. SoftBank Group gained 13%, while Ibiden surged 19%, Advantest rose 8%, and Kioxia Holdings increased by 12%. Stocks related to multilayer ceramic capacitors (MLCC) also saw significant buying, with Murata Manufacturing hitting its upper price limit and Daiyo Yuden climbing 24%.
Investors also showed increased interest in stocks that had been relatively overlooked during the recent market uptrend. Buying pressure extended beyond AI and semiconductor stocks to include construction, aviation, chemical, and automotive sectors, which had faced concerns over rising oil prices and supply chain disruptions.
In the construction sector, Daisei Construction rose by 14% at one point, while Kajima gained 12%. Airline stocks, including Japan Airlines (JAL) and ANA Holdings, also performed well. The opening of the Strait of Hormuz alleviated supply chain fears, contributing to gains for chemical companies like Mitsubishi Chemical Group and Mitsui Chemicals, as well as automotive stocks like Toyota.
The Nikkei reported that bullish sentiment is prevailing in the market, with many investors expecting the Nikkei to surpass the 70,000 mark as the next milestone.
Takehiko Masuzawa, head of equity trading at Phillip Securities, noted, "As concerns over oil prices and supply chains diminish, there is a sense of urgency among investors to participate in the rising market."
Amid this strong market atmosphere, the Nikkei is seen as approaching the critical threshold of 70,000, which many believe could be the next significant target.
* This article has been translated by AI.
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