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Nikkei closes above 33,000 for the first time in 33 years

The Nikkei index in Japan displayed a remarkable surge, crossing the 33,000 threshold for the first time in 33 years, with technology shares leading the charge on the back of optimistic expectations for investments in chip-related companies. SoftBank Group Corp experienced a notable increase of 5.25% due to reports of a potential collaboration in an AI venture with OpenAI, the operator of ChatGPT, as well as discussions about investment opportunities for its semiconductor unit, Arm, with Intel Corp. Furthermore, Advantest Corp, a manufacturer of chip-testing equipment, witnessed a significant surge of 4.79%. Another noteworthy development was the 4.99% jump in the shares of Toyota Motor Corp following the automaker’s announcement of plans to introduce next-generation battery electronic vehicles (EVs) to the market starting in 2026. The Nikkei continued its positive trajectory, rising for the third consecutive session with a gain of 1.8% to reach 33,018.65, thereby closing above a key psychological level not seen since July 1990. In parallel, the broader Topix index saw a rise of 1.16% to reach 2,264.79.

The positive momentum in global shares on the preceding day, in anticipation of crucial U.S. inflation data and policy decisions from the Federal Reserve, Bank of Japan, and other central banks, contributed to the market’s buoyancy. Commenting on the situation, Daiwa Securities strategist Kenji Abe remarked that Toyota’s EV strategy was well-received by the market, coupled with the strength observed in the U.S. market during the previous night, thereby setting the stage for a robust market performance. He further added that given expectations of a soft landing in the U.S. and potential easing by the Federal Reserve later in the year, the current high valuation is likely to persist in the near term.

Among the constituents of the Nikkei, 170 companies experienced gains, while 54 saw declines. However, drugmaker Eisai Co Ltd (OTC:ESAIY) stood out as an outlier, retracting by 2.22% after a surge on Monday driven by positive news concerning its Alzheimer’s treatment. In terms of industry sub-indexes on the Tokyo Stock Exchange, the automotive sector emerged as the top performer, rising by 3.4%. Conversely, a basket of paper producers faced losses, dropping by 1.05%.

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