The Nikkei Stock Average hit a new high in April. Contributions from 2 semiconductor manufacturing equipment companies, 1 specialty retailer and 1 AI-related holding company, together with expectations of futures short covering, drove the market higher.
Japanese equities rose sharply in April, with the Nikkei Stock Average leading the month-on-month advance. Among individual company contributions, 2 semiconductor manufacturing equipment companies, 1 specialty retailer and 1 AI-related holding company had a significant impact. Overall, analysis indicated that the core gain in April was around 6%.
Futures short covering was cited as one factor that pushed up the Nikkei. With foreign investors maintaining net short positions in Nikkei futures, the short positions were unwound as the Nikkei moved above ¥57,000, raising the possibility that the index was pushed up excessively.
In terms of earnings trends during the same period, 206 companies had announced their FY2025 results by 15 April. In FY2025, sales increased 2.7% year on year and ordinary profit increased 4.3%, with 61% of companies recording ordinary profit growth. For FY2026, sales are forecast to increase 6.0% and ordinary profit 6.3%, while 73% of companies forecast ordinary profit growth in their initial plans for FY2026.
In terms of share-price reactions, it was suggested that companies announcing share buybacks and dividend increases as voluntary shareholder-return measures have often shown relatively firm performance. Against this backdrop, the April market was shaped by the combined effects of contributions from specific companies, expectations of futures short covering and earnings trends.