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Nikkei hits record high as AI fears fade and yen weakens

Summary:Japanโ€™s Nikkei 225 climbed to a new record high on Wednesday, buoyed by a rebound in technology shares as concerns about artificial intelligence disruption eased and the yen weakened.The benchmark Nikkei rose 1.4% in early trade to 58,100 and above, surpassing its previous peak set earlier this month following Prime Minister Sanae Takaichiโ€™s election victory. The broader Topix index advanced 0.3% to 3,800+ reflecting a more measured gain across the wider market.Technology and semiconductor-related stocks were the primary drivers of the move. Improved sentiment toward AI-linked names in the United States spilled over into Tokyo trading, encouraging investors to rotate back into previously pressured software and chip shares. The easing of global AI-related jitters appeared to support broader risk appetite, particularly in high-beta sectors.Shares of Nomura Research Institute surged as much as 9% before paring gains to trade around 6% higher after announcing new support services tied to Anthropicโ€™s Claude AI platform and plans for deeper collaboration with the US-based lab. The development underscored the ongoing integration of generative AI into Japanโ€™s corporate ecosystem.Currency moves also provided support. The Japanese yen weakened against the dollar early during the session, offering a tailwind to exporters and index heavyweights, though it later retraced part of the decline.Separately, a report suggested Prime Minister Sanae Takaichi had conveyed reservations about further rate hikes during discussions with Bank of Japan Governor Kazuo Ueda. Any perception of a slower pace of monetary tightening would likely be welcomed by equity investors, particularly given the marketโ€™s strong run.Market breadth was moderately positive, with 120 gainers versus 105 decliners on the Nikkei.The move highlights the confluence of supportive global tech sentiment, currency dynamics and domestic policy signals underpinning Japanโ€™s equity rally. —Meanwhile, Trump has begun his State of the Union address. Apparently its going to be two hours long and the excerpts I’ve seen don’t have much for markets at all:Advance excerpts of Trump’s speech show its lackluster
This article was written by Eamonn Sheridan at investinglive.com.

๐Ÿ”— Source

๐Ÿ’ก DMK Insight

Japan’s Nikkei 225 hitting a record high signals a shift in market sentiment, and here’s why that matters: The 1.4% rise to 58,100 indicates renewed confidence in tech stocks, especially as fears around AI disruption subside. This rebound could attract both retail and institutional investors looking for growth, particularly in sectors that benefit from a weaker yen. Traders should keep an eye on the correlation between the Nikkei and the USD/JPY exchange rate; a continued yen weakness could further boost Japanese exports, enhancing corporate earnings. However, itโ€™s worth noting that this surge may also lead to profit-taking in the near term, especially if the market overextends. On the flip side, if global economic indicators shift negatively, we could see a quick reversal. Watch for key support levels around 57,500; a break below that could trigger selling pressure. Additionally, monitor upcoming earnings reports from major tech firms, as they could either validate this bullish trend or provide a reality check. Overall, the Nikkei’s momentum is something to ride, but be prepared for volatility as traders react to broader economic signals.

๐Ÿ“ฎ Takeaway

Watch the Nikkei 225 closely; a break below 57,500 could signal a reversal, while continued yen weakness may fuel further gains.

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