Tokyo Stocks Surge as Nvidia Boosts Semiconductor Sector; Yen Hits 38-Year Low

Tokyo Stocks Surge Amid US Tech Rally

Tokyo stocks experienced a significant rise on Wednesday, driven by gains in the leading US technology index, the Nasdaq. This surge was primarily influenced by NVIDIA shares closing nearly 7% higher, which positively impacted the Japanese semiconductor sector. The Nikkei 225 index rose by 1.26%, or 493.92 points, to close at 39,667.07 points, while the broader Topix index increased by 0.56%, or 15.58 points, to close at 2,802.95 points.

Daiwa Securities commented, “The recovery of NVIDIA, a symbol of AI innovation, has improved the sentiment of the entire high-tech sector.” This positive performance of Nvidia shares had a ripple effect on Japanese semiconductor companies. Advantest, a chip manufacturing company, saw its stock jump by 7.02% to 6,222 yen (about $39), while Tokyo Electron's stock rose by 3.63% to 35,650 yen (about $222).

Yen Hits Lowest Level in 38 Years

Amid the positive movement in the Tokyo stock market, the yen fell to its lowest levels against the dollar since December 1986, reflecting the significant gap in interest rates between Japan and the United States. The dollar touched 160.63 yen, its highest level in nearly four decades, rising 0.5% to 160.455 yen in the latest trading. Continued low interest rates in Japan, compared to high interest rates in the United States, continue to pressure the yen.

On Wednesday, the yield on 10-year Japanese bonds reached 1.03%, while the yield on 10-year US Treasury bonds reached 4.304%. The dollar index, which measures the US currency against six other currencies, rose by about 0.2% to 105.92 points. Market participants are closely monitoring upcoming data releases, including the US Personal Consumption Expenditures Index, which is the Federal Reserve's preferred measure of inflation.