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On the morning of the 29th, the Tokyo Stock Exchange saw a significant rebound in the Nikkei 225, which rose by 633.30 points (1.68%) to close at 38,355.70 points. This surge was fueled by strong earnings from semiconductor giant Nvidia and a rapid depreciation of the usd against the dollar. As Nvidia’s positive quarterly results boosted the tech sector, especially high-tech stocks in Japan, the Nikkei continued to rise throughout the session. Additionally, the US ruling against tariffs, which led to a sharp fall in the usd, encouraged foreign short-term investors to increase their purchases of Japanese index futures, further pushing the Nikkei upward.
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On the morning of the 29th, Japan’s Nikkei 225 surged significantly, closing at a 1.68% increase, with the index at 38,355.70 points. The positive earnings report from Nvidia played a major role, with the company’s revenue for Q1 2025 reaching \$44.06 billion, a 69% increase from the previous year, surpassing market expectations. Nvidia’s performance reflected sustained strong demand for artificial intelligence (AI) products, which boosted the stock prices of semiconductor companies in Japan like Tokyo Electron and Advantest.
Moreover, a key driver behind the rally was a ruling from the US International Trade Court, which deemed former President Trump’s tariffs illegal. This ruling alleviated fears of a global economic slowdown, allowing the usd to weaken significantly, dropping to around 146 usd per dollar. As foreign short-term investors aligned their strategies with the weaker usd, purchases of Japanese stock index futures surged, pushing the Nikkei 225 even higher.
The positive market sentiment was reflected in other major indices, with the Tokyo Stock Price Index (TOPIX) also gaining 1.47%, closing at 2,810.13 points. Additionally, the JPX Prime 150 Index saw a 1.75% increase, closing at 1,241.39 points. The total trading volume on the Tokyo Stock Exchange’s Prime Section was around 2.34 trillion usd, with 1130 stocks advancing, 420 declining, and 75 remaining unchanged.
Several major stocks, including Toyota, Honda, Sony Group, and Recruit, saw gains. Sony reached a new all-time high due to speculation about a potential stock split, while Bandai Namco, BayCurrent, and Nitori faced declines.
What Undercode Say:
The robust market performance seen on the Tokyo Stock Exchange can be attributed to two primary factors: Nvidia’s impressive quarterly earnings and the US court ruling on tariffs. Nvidia’s earnings report, which exceeded market expectations, highlighted the continuing strength of AI demand, further boosting optimism about the semiconductor sector. As a result, Japan’s semiconductor stocks, such as Tokyo Electron and Advantest, rallied significantly, lifting the broader market.
From a macroeconomic perspective, the US International Trade Court’s ruling on tariffs brought a sense of relief to global investors, as fears of trade restrictions affecting Japanese exports were alleviated. Japan, being heavily reliant on exports, stood to benefit from reduced trade tensions, which bolstered market confidence in the country’s economy.
In terms of the usd’s performance, the rapid depreciation against the dollar encouraged foreign investors to buy Japanese index futures, further driving the Nikkei’s climb. A weaker usd is often seen as beneficial for Japanese exporters, as it boosts their international earnings when converted into usd. This has created an ideal environment for stocks related to export-driven industries, especially in the automotive and technology sectors.
Moreover, there is growing optimism that corporate earnings in Japan will continue to outperform expectations, especially in industries like automotive manufacturing and technology, where global demand remains strong. Analysts are predicting that these positive trends will persist in the coming quarters, which will keep Japan’s stock market on an upward trajectory.
Japanese companies have also been making strides in improving their profitability and global competitiveness. With Japan’s GDP showing steady growth, it is likely that the market will continue to attract international capital, particularly from foreign institutional investors seeking growth opportunities in emerging markets.
While there are still concerns about global economic stability, especially regarding potential disruptions in the supply chain or geopolitical tensions, the overall sentiment towards Japan’s economy remains bullish in the short term. Investors are keen to ride the wave of positive earnings reports and favorable macroeconomic conditions, which could help support further gains in the Nikkei 225.
Fact Checker Results:
Accuracy of Nvidia’s Earnings: Nvidia’s Q1 2025 results are indeed impressive, with a 69% year-on-year revenue increase. The AI demand fueling this growth is well-documented. ✅
Tariff Ruling: The US court did rule that the tariffs imposed by former President Trump were illegal, creating a positive market reaction. ✅
Yen Depreciation: The usd did weaken significantly against the dollar, creating a favorable environment for export-driven stocks. ✅
Prediction:
Looking ahead, it is expected that the Nikkei will maintain a positive trajectory, fueled by continued growth in the semiconductor sector and a favorable global trade environment. The ongoing demand for AI technologies, combined with Japan’s strong export performance due to the weaker usd, will likely support investor confidence. However, any new developments in the US-China trade relations or shifts in global interest rates could impact the market’s momentum. Regardless, the outlook for Japan’s stock market remains optimistic in the short to medium term, with potential for further gains in key sectors like automotive, technology, and semiconductors. 📈
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Reported By: xtechnikkeicom_dc190441496f40dd47b01519
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