Nikkei Catches Up to Global AI Rally Amid Yen Volatility
The Tokyo stock market returned from its Silver Week holiday on Thursday to find itself caught up in a global rally driven by artificial intelligence. The Nikkei 225 rose 1.8% to 66,167.25 as of 10:09 a.m., while the broader Topix index gained just 0.2% to 4,097.42.
Chip-related companies like Ibiden Co. and Socionext Inc. were among the Nikkei's best performers, benefiting from the increasing complexity of AI semiconductors. Software names Baycurrent Inc. and Recruit Holdings Co., however, weighed on the index.
The global AI trade has been gaining momentum, with Meta Platforms Inc.'s new AI agent showing early signs of success and Alibaba Group Holding Ltd. unveiling what it calls China's most powerful AI chip. The Nasdaq 100 hit a fresh record high on Tuesday, but US equities pared gains on Wednesday amid inflation concerns.
As the Nikkei catches up with global markets, volatility in the yen is likely to keep investors cautious. Climbing bond yields are also a concern, with Japan's benchmark 10-year government bond yield rising eight basis points to 3.055% on Thursday morning. US Treasuries came under pressure after strong economic data stoked expectations of more Federal Reserve rate hikes.