Japan's Nikkei climbs on AI optimism despite Middle East tensions
The Nikkei 225 rose 0.43% as strong demand for AI and semiconductors lifted chip‑related stocks, while investors brushed aside concerns over the Iran‑US conflict and a firm yen.
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Desk Analysis
How This Affects the Exchange
Sector Effect
Neutral · Watch
AI‑related optimism may benefit technology stocks, but no direct Pakistani listed firms are clearly affected; watch for indirect sentiment.
Sectors & Direction
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Desk call: Watch · Neutral effect
- TechnologyNeutral effect
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Sectors: Technology — Neutral · Watch. AI‑related optimism may benefit technology stocks, but no direct Pakistani listed firms are clearly affected; watch for indirect sentiment.
Full Story
Open on Business Recorder## Market Overview
Japan's benchmark Nikkei 225 edged higher on Wednesday, gaining 0.43% to close at 65,549.88. The rally came as enthusiasm for artificial intelligence (AI) and robust semiconductor demand outweighed worries about a possible escalation in the Middle East and the impact of a stronger yen.
## Drivers of the Move
A Reuters poll showed business confidence among major Japanese manufacturers hitting its highest level since December 2021, driven by solid orders for chips and data‑centre equipment. The U.S. Philadelphia Semiconductor Index also rose 1.3% despite broader market pressure from rising oil prices linked to the Iran conflict.
## Corporate Highlights
Verizon’s multi‑billion‑dollar agreement with Corning to supply high‑density optical fibre for AI infrastructure lifted Japanese cable‑maker Fujikura, according to Nomura equities strategist Maki Sawada. The biggest gainers on the Nikkei were Furukawa Electric (+13.20%), Fujikura (+8.75%) and Lasertec (+6.56%).
## Counterbalancing Factors
The yen remained near a seven‑month high on expectations that the Bank of Japan could accelerate rate hikes as early as its next meeting. Sony Financial Group noted that the market has largely priced in the yen’s appreciation, suggesting a shift toward buying on dips once initial selling eases.
## Market Breadth
The index recorded 109 advancers against 116 decliners. Among the losers were Kyowa Kirin (‑5.12%), Sumitomo Pharma (‑5.02%) and Nikon (‑3.63%).