Nikkei 225 Holds Firm as Weak GDP Data Offset by Strong AI Earnings

The Nikkei 225 Index held steady at its highest level since July 10, despite weak Japan GDP data. The index reached 68,935 points, a 14% increase from its lowest point on July 29.

Japan's economy expanded by 1.1% in the second quarter, falling short of expectations for 2% growth. Soft domestic demand offset soaring exports and the impact of the US-Iran war.

The Bank of Japan is facing pressure to balance inflation at an elevated level with a weakening yen. The Japanese currency has retreated to historic lows, while crude oil prices remain high due to the US-Iran conflict.

Japanese stocks have benefited from the AI boom, with SoftBank stock rising 30% this year and Kioxia Holdings jumping by 418%. Tokyo Electron and Advantest also saw significant gains.