Nikkei Climbs on Wall Street Gains and Lower Crude Oil Prices

Japan’s Nikkei share average gained ground on Tuesday, driven by positive cues from Wall Street and a decline in crude oil prices. The Nikkei rose 0.2% to close the morning session at 70,081.53, while the broader Topix index climbed 0.4% to 4,163.61. Among the Nikkei’s 225 components, 140 stocks advanced, 82 declined, and three remained unchanged.

Overnight, all three major US indexes posted gains, with the tech-focused Nasdaq Composite reaching a record high on the back of strong performance from tech giants like Nvidia. In contrast, Japanese tech shares showed mixed results, with chip-equipment maker Advantest gaining 1.7%, while AI-focused investor SoftBank Group dropped 2.7%.

Nomura Securities strategist Wataru Akiyama noted that investors are reassessing stock valuations based on current price levels. He also highlighted the impact of falling crude oil prices, which are particularly significant for Japan due to its reliance on imported energy, primarily from the Middle East.

Traders are also keeping an eye on the outcome of a 10-year Japanese government bond auction later in the day. Yields have surged to multi-decade highs amid concerns over Prime Minister Sanae Takaichi’s expansionary fiscal policies and recent selloffs in French sovereign debt. Additionally, Bank of Japan Governor Kazuo Ueda is scheduled to deliver a speech after the market closes, which could provide insights into the central bank’s future interest rate policies.