Tokyo equities moved higher on Wednesday as the headline Nikkei index scaled a record intraday level, powered by strong performance in chip-related companies that outweighed weakness in banks and other value sectors.
At 0147 GMT the Nikkei was trading up 1.25% at 65,811.78, after earlier climbing as much as 2.2% to touch an intraday peak of 66,428.81. The broader Topix index gained 0.15% to 3,944.19.
Market strategists said investor capital has been concentrated in high-performing semiconductor-themed names, leaving many traditional value stocks out of favour while technology-linked names deliver solid returns. Observers also noted that Japan's rally followed a similar pattern in the United States, where semiconductor shares led gains even as the Dow slipped.
U.S. benchmarks provided mixed signals overnight. The S&P 500 and Nasdaq closed at record highs on Tuesday, supported by optimism around artificial intelligence, while the Dow Jones Industrial Average finished lower by 0.23%.
On the Tokyo market, several chip-focused companies posted notable gains. Chip-making equipment maker Tokyo Electron rose by more than 5%, and chip-testing equipment supplier Advantest also advanced by over 5%.
Not all large names participated in the rally. SoftBank Group weakened, slipping 4.3%, and chip designer Socionext recorded the largest percentage decline on the Nikkei, falling 5.8%.
Analysts pointed to rotation even within AI-related stocks, with investors shifting targets between different firms in the theme rather than uniformly buying all names linked to the sector.
Banking stocks underperformed, contributing to sector weakness. Mitsubishi UFJ Financial Group eased 0.49% and Mizuho Financial Group dropped 0.95%. The Topix bank index fell 0.76%. Real estate shares were the weakest group, with the real estate index down 1.48%, the largest decline among the 33 industry sub-indexes.
Market breadth on the Tokyo Stock Exchange prime market showed a greater number of decliners than advancers: of nearly 1,600 stocks trading, 44% rose, 52% fell and 3% were unchanged.
Market snapshot
- Nikkei (intraday high): 66,428.81
- Nikkei (0147 GMT): 65,811.78, up 1.25%
- Topix: 3,944.19, up 0.15%
- Notable moves: Tokyo Electron and Advantest +more than 5% each; SoftBank -4.3%; Socionext -5.8%
The moves reflected investor preference for semiconductor-related exposure amid AI-driven optimism in global markets, while financials and property names lagged. At the same time, geopolitical concerns were cited as a source of lingering anxiety in markets elsewhere, even as U.S. equities extended gains in some indexes.