Nikkei 225 Holds Steady as AI Boom Continues, Japan GDP Growth Slows

The Nikkei 225 Index held steady at its highest level since July 10, reaching 68,935 points. The index has surged by 14% from its lowest point on July 29.

This stability comes despite the release of weak Japan GDP data, which showed a 1.1% growth in the second quarter, missing the expected 2% expansion. Soft domestic demand offset soaring exports and the impact of the US-Iran war contributed to this slowdown.

The Bank of Japan predicted that the economy will grow by 0.6% this year, up from 0.5% last year. However, inflation remains high due to elevated crude oil prices caused by the US-Iran conflict. The yen has retreated to its lowest level in years, which benefits exporters but hurts importers.

The ongoing AI boom is driving growth for Japan stocks, with top constituents such as SoftBank and Kioxia Holdings seeing significant gains. SoftBank's stock has jumped 30% this year, while Kioxia's stock has surged by 418% in the same period.