The Japanese stock market finally recovered after four consecutive days of decline. On Thursday, the Nikkei 225 index rose around 2.7%, while the Topix index strengthened 1.7%. In the morning session, the Nikkei even jumped more than 4%, its sharpest intraday gain in more than six weeks. The main driver came from Wall Street, after Nvidia released a revenue forecast that far exceeded expectations, immediately boosting market appetite for AI-themed stocks.

The technology sector was the main driver of the rally. Stocks such as Advantest, Disco, and Ibiden recorded sharp gains, as concerns that AI spending would slow down eased. Nomura strategists called Nvidia's results "nearly flawless" and received very positively by investors. The Topix electrical equipment sub-index, which is heavily loaded with technology stocks, surged strongly and became one of the main drivers of the day's rally.

In addition to AI factors, a weaker yen also helped lift shares of Japanese exporters. The yen briefly fell to around 157 per US dollar, following the strengthening of the greenback as markets began to reduce expectations of an imminent Fed rate cut. Meanwhile, the surge in Japanese government bond yields to multi-year highs provided a boost to banking stocks, which benefited from expectations of wider interest margins.

However, despite this rally, risks remain significant. The market is still awaiting details of Prime Minister Sanae Takaichi's economic stimulus package, which is feared to further burden Japan's fiscal position. Rising bond yields and the yen's continued weakening have begun to raise alarm among analysts. At the same time, diplomatic tensions with Beijing are also factors that could further depress sentiment if they escalate at any time. (asd)

Source: Newsmaker.id