Japanese stocks surged strongly. The Nikkei 225 index rose around 1.3% to near 50,900 on Wednesday, briefly setting a new record. Japanese market sentiment was also influenced by the tech rally on Wall Street, where artificial intelligence (AI) euphoria remains a key driver. Nvidia soared again after CEO Jensen Huang announced a series of new partnerships and dismissed the "AI bubble" issue. Japanese stocks close to the AI ​​and chip supply chain also surged, including big names like Advantest, SoftBank Group, Lasertec, Fujikura, and Disco Corp.

Japanese investors are also positioning themselves for two major central banks. In the US, the market is almost certain the Fed will cut interest rates by 0.25 percentage points tonight, for the second time this year, to support the US economy, which is starting to show signs of slowing employment. Meanwhile, the Bank of Japan is expected to maintain its loose policy stance at its meeting on Thursday, with most observers expecting a rate hike in Japan. The combination of "Fed loose, BOJ remains cheap" makes Japanese stocks—especially growth sectors—look even more attractive.

On a geopolitical level, the story is even more interesting. US President Donald Trump met with Japanese Prime Minister Sanae Takaichi, and the two countries agreed to promote major cooperation in trade, critical minerals, and rare earths. The essence of the agreement: securing supplies of crucial raw materials for chips, batteries, AI, and defense, so as to reduce dependence on China. Takaichi—Japan's first female prime minister—even called US-Japan relations entering a "golden era," while Trump said this cooperation would make trade between the two countries "bigger than ever."

For the Japanese market, it all connects. The AI ​​story is sending local tech stocks soaring. The Fed's possible interest rate cut is providing more global liquidity for risky assets. The Bank of Japan's reluctance to raise interest rates is helping to keep funding costs low domestically. And the US-Japan alliance over the chip and mineral supply chain is making investors increasingly confident that Japan isn't just "old tech" but a key player in global AI infrastructure. The result: risk-on mode, the Nikkei at an all-time high, and the market sending a clear message — AI isn't just hype; it's state-level political economy. (asd)

Source: Newsmaker.id