Nikkei Soars Over Four Percent Amid Wall Street Rally

Japan's Nikkei share average surged more than four percent on Friday, propelled by a rally on Wall Street. Microsoft led the tech sector rebound after delivering forecasts that alleviated concerns about massive AI infrastructure spending.

The Bank of Japan is widely expected to keep monetary policy steady later in the day, with key rates likely to remain at one percent and borrowing costs continuing to rise. This decision comes as mounting price pressures from a weak yen and the Middle East conflict risk driving underlying inflation above its target.

The Nikkei ended the morning session up 4.4% at 64,572.25 after surging as much as 5.7% at one point. The broader Topix rose 1.5%. Chip-testing equipment manufacturer Advantest soared 17%, while AI-focused startup investor SoftBank Group leapt more than 15%.

However, automakers declined as a group, with Toyota down 1.9% and Honda losing 2.9%. This drop is due to the stronger yen, which lowers the value of overseas revenue when repatriated.