Nikkei Extends Gains on Tech and Oil Support but Rate Concerns Linger

The Nikkei Stock Average rose 0.19% in morning trade on October 6, reaching 70,081.53 points. This modest gain marked a second straight session of growth, supported by AI and semiconductor stocks following gains in U.S. tech shares. Falling crude oil prices also boosted buying across sectors, with advancers outnumbering decliners by more than 7-to-1 on the TSE Prime Market.

Despite initial gains, concerns over rising global interest rates limited further upside. Investors adopted a cautious stance ahead of the 10-year Japanese government bond auction and remarks from the Bank of Japan governor. The TOPIX index rose 0.44% to 4,163.61, outperforming the Nikkei in percentage terms. Trading value on the TSE Prime Market totaled approximately $21.5 billion.

Crude oil prices traded in the $89 range, with reports of robust Middle East exports and potential G7 strategic petroleum reserves releases capping upside. Falling oil prices acted as a buying catalyst, as lower energy costs were seen as beneficial for corporate expenses and consumer purchasing power.

Chisa Kobayashi, Japan equity strategist at UBS SuMi TRUST Wealth Management, noted that while profit-taking pressure remained subdued, rapid stock price acceleration is unlikely amid rate concerns. She emphasized that stock selection based on solid earnings performance will likely intensify in a rising rate environment.