The Nikkei 225 recovered to above ¥70,000 at the close on 6 October for the first time in approximately 3 months. The move was driven by firm performance in US technology stocks, and the index is expected to test the level of its record high on 25 June.
The Nikkei 225 ended 6 October at ¥70,683.98, up ¥737.12 from the previous day, returning to the ¥70,000 range on a closing-price basis for the first time in approximately 3 months. Its most recent low was ¥63,484.10 on 15 September.
Among US stocks, technology shares performed particularly well. From 15 September to 5 October, the Philadelphia Semiconductor Index rose 17.9% and the Nasdaq Composite rose 5.8%, reaching a new all-time high.
By contribution from Nikkei 225 constituents, high-priced AI and semiconductor-related stocks such as Advantest and Tokyo Electron accounted for nearly all of the top 10 contributors, lifting the Nikkei 225 by approximately ¥6,000.
With the main earnings season for Japanese and US companies approaching, EPS growth is expected to provide a positive outlook. However, attention is required regarding negative views on the earnings of AI and semiconductor-related companies, political uncertainty surrounding the US midterm elections, and the impact of worsening conditions in the Middle East and higher crude oil prices. We expect upside to around ¥76,600 by next March.