Japan's Nikkei rises past 72,000 mark for first time as AI euphoria persists

Synopsis

Japan's Nikkei index soared past 72,000 for the first time, fueled by enthusiastic AI investments that overshadowed concerns about US-Iran peace talks. The government's ambitious plan to invest heavily in strategic sectors like AI and chips by 2040 further boosted market sentiment. Nonferrous metals and electric appliances were top performers, while J.Front Retailing surged on activist investor interest.

Japan's Nikkei share gauge surged past the 72,000 mark for the first time on Monday as euphoria over AI investment outweighed uncertainty over U.S.-Iran peace talks.

The benchmark Nikkei 225 advanced 1.4% to 72,247.21 in early trading after touching a record intraday high ‌of 72,269.64. The ⁠broader Topix ⁠gained 1.1% to 4,089.59.

The government of Japanese Prime Minister Sanae Takaichi plans to set a target of about 370 trillion yen ($2.29 trillion) in public and private investment in strategic sectors including AI and chips by 2040, the Nikkei reported on Friday.

Shares extended gains after Qatar and Pakistan, mediators to peace talks ⁠between the ‌U.S. and Iran, said progress had been made and negotiations would continue following a tense opening.

"AI-related companies ⁠are once again playing a leading role in driving the market," said Wataru Akiyama, an equities strategist at Nomura Securities. "A high level of vigilance regarding developments in the situation in Iran and the Middle East is likely to persist."

Nonferrous metals led Topix sector gains, up 7.57%, followed by electric appliances and glass & ceramics products, which rose 2.08% ‌and 2.05%, respectively. Real estate shares were among the laggards, down 1.07%.

There were 146 advancers in the Nikkei 225 against 75 decliners and ⁠three unchanged.

J.Front Retailing led gainers with a 16.24% surge after activist investor 3D Investment Partners said it took a 5.10% stake in the department store operator.

It was followed by Yaskawa Electric, trading up 9.02%, and robot maker Fanuc, which gained 8.10%.

The largest losers were Taiyo Yuden, down 3.37%, followed by Tokyo Electric Power, 3.05% lower, and Obayashi, which lost 2.99%.

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