The Nikkei Stock Average returned to the ¥70,000 range at the close for the first time in 3 months, apparently driven by strength in U.S. technology stocks. It is expected to trade toward retesting its record high of ¥72,366.34.
The Nikkei Stock Average closed on 6 October at ¥70,683.98, up ¥737.12 from the previous day, returning to the ¥70,000 range at the close for the first time in approximately 3 months. Its recent low was ¥63,484.10 on 15 September, and it rose ¥7,199.88, or 11.3%, in 12 trading days.
The strength of U.S. technology stocks was cited as a factor. The SOX Index rose 17.9% from 15 September to 5 October, while the Nasdaq Composite also rose 5.8% to set a new record high.
By contribution to the Nikkei Stock Average, high-priced AI and semiconductor-related stocks such as Advantest and Tokyo Electron ranked among the top contributors, lifting the index by approximately ¥6,000.
As earnings announcements by Japanese and U.S. companies gather pace, market forecasts, including the EPS growth outlook for the S&P 500, are broadly optimistic. The 12-month forward EPS for the Tokyo Stock Price Index (TOPIX) also appears to be on an upward trend, prompting the view that the recent rise in share prices may have anticipated strong earnings.
The Nikkei Stock Average is expected to trade first toward its record-high level of ¥72,366.34. Risks include deteriorating earnings at AI and semiconductor-related companies, political uncertainty surrounding the U.S. midterm elections, and the possibility that higher oil prices resulting from worsening Middle East conditions could heighten inflation concerns.