AI chip surge lifts Nikkei to record high; banks, property lag

The Nikkei 225 climbed to a record high on Wednesday as semiconductor stocks rallied on demand tied to artificial intelligence. The index was up 1.25% at 65,811.78 as of 0147 GMT after touching an intraday peak of 66,428.81. The broader Topix rose 0.15% to 3,944.19.

Tokyo Electron and Advantest each gained more than 5%, making the largest contributions to the Nikkei’s advance. Chip-related names led the market, following strength in U.S. technology stocks overnight.

Investors concentrated buying on companies viewed as beneficiaries of AI infrastructure spending. Kazuaki Shimada, chief strategist at IwaiCosmo Securities, noted that “investor money is concentrated on high-flying chip-related shares. There is no need to buy value shares when technology shares are giving solid returns.” He added that Japan’s market mirrored U.S. moves, where semiconductor plays advanced even as the Dow fell.

The rally was selective within technology. SoftBank Group fell 4.3% and chip designer Socionext dropped 5.8%, the largest percentage fall on the Nikkei for the session. Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory, observed that “even within the AI-theme stocks, investors are rotating their targets,” reflecting shifting focus after a sharp run-up.

Outside semiconductors, the market showed pockets of weakness. The Nikkei bank index declined 0.76% and the real estate sector fell 1.48%, the weakest among the Tokyo Stock Exchange’s 33 industry sub-indexes. Market breadth was mixed: of about 1,600 stocks on the TSE Prime Market, 44% advanced, 52% declined and 3% were unchanged.

In the United States, the S&P 500 and Nasdaq closed at record highs in the previous session while the Dow Jones Industrial Average slipped 0.23%. The strong performance of semiconductor names reflected expectations that AI investment will boost demand for chips and related equipment.

Heavyweight chip stocks pushed the Nikkei to fresh records while banks, property and some other technology firms lagged, leaving gains concentrated in a relatively small group of companies tied directly to AI and semiconductor supply chains.