Japan, Aug 10 : Japan’s Nikkei share average climbed 2% on Monday, supported by strong gains in artificial intelligence and semiconductor-related stocks after U.S. technology shares advanced at the end of last week. However, uncertainty over developments in the Middle East kept investors cautious and restricted further gains.
The Nikkei was trading 2% higher at 66,927.61 at 0126 GMT, while the broader Topix index gained 0.44% to 4,092.93.
Daiwa Securities senior strategist Daisuke Hashizume said semiconductor linked companies were among the main drivers of the market’s advance. Expectations that the U.S. Federal Reserve may hold off on raising interest rates at its September meeting also boosted sentiment.
U.S. equities finished higher on Friday, with the S&P 500 closing at a record level. Major Wall Street indexes posted strong weekly gains after employment data showed the U.S. economy unexpectedly lost jobs last month. The weaker labor market reading reduced expectations of another Fed rate increase.
Investors, however, remained alert to developments in the Middle East. Uncertainty surrounding the possible reopening of the Strait of Hormuz continued after Iran said negotiations with Oman over new shipping routes had reached their final stages. Tehran indicated that additional conditions still needed to be addressed by the United States.
Japanese technology stocks benefited from the improved global sentiment. Advantest gained 5.3%, while Tokyo Electron advanced 3.4%. Fujikura climbed 7%, extending its recent rally after the fiber-optic cable manufacturer raised its full-year net profit forecast.
Ibiden, which supplies components to Nvidia, rose 6.28%, adding to the strength across AI-related shares.
Recruit Holdings attracted heavy buying interest after the staffing company upgraded its annual forecasts beyond market expectations. Trading in the stock was temporarily unavailable because buy orders overwhelmed sell orders. Its shares were quoted at the daily limit-up level of 16,165 yen, representing a 22.79% increase from the previous close.
Despite the strong opening, market activity remained relatively subdued as Japan entered the Obon summer holiday period. Hashizume said the absence of major market-moving developments later in the week could leave the country’s benchmark indexes without a clear direction.
Not all stocks participated in the rally. Fast Retailing, the owner of the Uniqlo brand, slipped 0.23%.
Mitsui Kinzoku was among the biggest decliners, plunging 17% after its revised annual net profit outlook fell short of investor expectations. The company manufactures materials used in lithium-ion batteries.
Overall, gains in AI and semiconductor stocks provided a significant lift to Japanese equities, although geopolitical risks, holiday thinned trading and mixed corporate outlooks continued to weigh on investor confidence.