Japan's benchmark Nikkei share average crossed the 68,000 mark for the first time on Wednesday, extending its record-setting rally as strong gains in artificial intelligence and semiconductor-related stocks outweighed investor concerns over escalating tensions in the Middle East, Reuters reported.
The Nikkei advanced 2.2% to 68,203.79 in morning trade, just two days after surpassing the 67,000 level. The broader Topix index also climbed 1.5% to 3,982.89.
According to Reuters, investor sentiment was boosted by continued strength in technology shares following positive cues from Wall Street and optimism surrounding demand for AI-related products and services.
Memory chip maker Kioxia Holdings surged as much as 7.2%, crossing the 80,000-yen threshold for the first time after announcing plans to begin dividend payments from fiscal 2027, supported by strong earnings performance. The rally briefly propelled Kioxia ahead of Toyota Motor as Japan's second-most valuable listed company, according to a report.
Semiconductor-related stocks were among the biggest contributors to the market's gains. Tokyo Electron jumped 10.3%, while semiconductor testing equipment manufacturer Advantest rose 4.1%. Together, the two companies added nearly 840 points to the Nikkei index.
Reuters reported that analysts attributed the rally to sustained enthusiasm for AI-linked companies and expectations of robust demand across the semiconductor supply chain.
Among the Tokyo Stock Exchange's 33 industry sectors, 25 posted gains. Nonferrous metals led the advance with a 6.3% jump, while pharmaceuticals was the weakest-performing sector, declining 2.2%.
Oil prices rose more than 1% after geopolitical tensions in the Middle East intensified. Iran launched missiles at Kuwait and Bahrain, while diplomatic efforts with the United States showed limited progress, raising concerns about regional stability and energy supplies.
Within the Nikkei, semiconductor equipment manufacturer Screen Holdings emerged as the top performer, soaring 13.9%, followed by cable and optical fibre producer Fujikura, which gained 11.1%.
On the downside, software testing company SHIFT fell 9.2%, making it the biggest decliner in the benchmark index. Heavy machinery maker IHI also retreated 5.5%.
