Investor confidence surged as Japan’s Nikkei soared, mirroring Wall Street’s strong gains from the previous week. With the U.S. Congress averting a government shutdown and global risk sentiment improving, Japanese stocks rallied across sectors. Semiconductor giants, heavy machinery firms, and tech leaders led the charge, reinforcing market optimism.
Japan’s Nikkei share average climbed 1.1% to 37,475.24 by midday, reaching its highest level in over a week, while the broader Topix advanced 1.2% to 2,747.62. The rally was fuelled by Wall Street’s rebound, where all three major U.S. indexes closed higher on Friday as investors sought bargains after a volatile period. The passage of a U.S. stopgap spending bill further stabilised sentiment.
Japanese heavyweights saw notable gains, particularly in the semiconductor sector. Tokyo Electron jumped 2.9%, and Advantest added 2.2%, following the recovery of U.S. tech stocks. Heavy machinery stocks also surged, with Mitsubishi Heavy Industries soaring 11% on speculation of increased Japanese defence spending, while Kawasaki Heavy Industries climbed 5.2%.
While global risk-off sentiment eased, investors remained focused on the upcoming U.S. retail sales report, assessing potential implications for economic growth. Meanwhile, the U.S. Federal Reserve and the Bank of Japan are expected to hold their policies steady in upcoming meetings as they evaluate economic conditions.
Other major stocks showed solid performance, with AI-focused investor SoftBank Group and gaming giant Sony Group both rising over 2%. Fast Retailing, the parent company of Uniqlo, saw a modest increase of 0.4%.
With positive momentum from Wall Street and strong performances in key sectors, Japan’s stock market has regained strength. Investors now look ahead to central bank decisions and economic data releases to gauge the next market moves.
Fidelity Japan Trust PLC (LON:FJV) aims to be the key investment of choice for those seeking Japanese companies exposure. The Trust has a ‘growth at reasonable price’ (GARP) investment style and approach – which involves identifying companies whose growth prospects are being under-appreciated or are not fully recognised by other investors.
