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Japan’s Nikkei 225 jumped 2.53% to 70,037.61 on October 5, reaching its highest level in three months. The Japan stock market gained as investors returned to AI stocks and semiconductor shares in Tokyo.
The index briefly touched 70,072 during Monday’s session, while the broader Topix gained 1.16% to 4,138.57. The rally followed stronger Wall Street trading after softer US jobs data reduced Federal Reserve rate hike expectations.
Semiconductor stocks led the advance, with Tokyo Electron gaining about 5.7% and Advantest climbing nearly 4.5%. SoftBank Group also advanced 3.68%, adding further strength to the technology-led move.
The gains show renewed demand for AI stocks, particularly companies linked to chip production and artificial intelligence infrastructure. Investors have again focused on AI spending prospects after recent market weakness.
Mamoru Shimode, chief strategist at Resona Asset Management, said investors bought AI-related shares. He also warned that market sentiment remains more selective than earlier this year.
Kioxia offered a clear example of that cautious approach, gaining 0.49% during the session. The memory maker remains almost 50% below its record high from mid-June.
Financial stocks also participated as Mitsubishi UFJ Financial Group gained 0.99%. Mizuho Financial Group added 1.86%, supporting the broader Japanese market advance.
Market breadth remained mixed despite the strong headline gain in the Nikkei 225. Around 53% of Tokyo Stock Exchange Prime Market shares advanced, while 42% declined.
The biggest warning signal emerged from Japan’s bond market as the 30-year government bond yield reached 4.235%. Investors awaited Prime Minister Sanae Takaichi’s policy speech for signals about spending and economic policy.
Concerns about government spending have increased pressure on longer-term Japanese government bonds. The 10-year yield fell slightly to 3.08%, while the two-year yield declined to 1.9%.
For the Japan stock market, the next test involves holding 70,000 after Monday’s sharp rebound. Broader participation will also determine whether the AI-led rally can extend beyond major semiconductor names.
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