The Nikkei average closed at its highest level in about four weeks, led by gains in AI-related and semiconductor stocks. The retreat in expectations for U.S. interest-rate hikes was also seen as improving investor sentiment.
The Nikkei average closed 2.08% higher than the previous weekend at 66,970.22 in Tokyo trading on Monday, reaching a four-week high. The TOPIX also extended its gains, rising 0.63% to 4,100.61. Buying in AI-related and semiconductor stocks supported the market.
Among individual stocks, semiconductor inspection equipment giant Advantest surged 6.43%, while semiconductor manufacturing equipment maker Tokyo Electron rose 4.13%. Buying also spread across the AI-related supply chain, lifting Ibiden 4.03%. Fujikura, a maker of fiber-optic cables, extended its gains, climbing 7.62%. The stock was supported by the company's decision late the previous weekend to raise its full-year net profit forecast.
The main focus was Recruit Holdings, whose shares surged to ¥16,165 after its upward revision to its full-year earnings forecast substantially exceeded market expectations. Buy orders flooded in, and there were periods when trades could not be matched.
Fast Retailing, meanwhile, fell 0.74%, while Mitsui Mining & Smelting dropped 13.55% after its full-year net profit forecast disappointed expectations. Tensions in the Middle East weighed on the market as a geopolitical risk, while uncertainty over the reopening of shipping routes through the Strait of Hormuz persisted. Trading was also thin as Japan entered the Obon holiday period, prompting views that it would be difficult to identify a clear market direction over the next few days.