On August 13th, the Nikkei Stock Average on the Tokyo Stock Exchange closed at 36,232.51 yen, up 1,207 yen from last week’s closing price. This marks the first time in seven business days since August 1st that the index has surpassed 36,000 yen, recovering to levels seen before the ‘historic crash’ on August 5th. The previous day’s rise in the tech-heavy Nasdaq Composite Index in New York provided a boost, leading to increased buying of semiconductor-related stocks and others in the Tokyo market.
Technology firms including Tokyo Electron Ltd. rose after Nvidia Corp. boosted the Philadelphia Stock Exchange Semiconductor Index.
“The major selloff reached its peak last week, and investor focus is now returning to fundamentals such as corporate profitability,” said Ikuo Mitsui, a fund manager at Aizawa Securities. “Investors are taking advantage of cheaper valuations to buy stocks.”
Both the Nikkei 225 and the Topix have declined by about 9% since the end of July, following the Bank of Japan’s decision to raise its benchmark interest rate and reduce bond purchases. The indices are now down approximately 13% from their record highs last month, having entered a bear market on August 5th when losses surpassed 20%.
“Japanese stocks are expected to be relatively calm today for the first time in a while,” said Ryuta Otsuka, a strategist at Toyo Securities Co. “The stability of the yen will also contribute to stabilizing Japanese stocks.”
High-dividend stocks, along with semiconductor shares, remained popular. Some market analysts suggest that the recently revamped Nippon Individual Savings Account program, a tax-exempt investment vehicle, is driving fund inflows from retail investors.
The weaker yen against the dollar in the foreign exchange market also supports export-related stocks.
The rise in U.S. tech stocks further fueled purchases of semiconductor shares, including Tokyo Electron. Hitachi surged as much as 5% to reach an all-time high, while Sony Group rose 4%, marking its highest level since early 2023. Toyota Motor also climbed by as much as 4%.
‘Buying momentum has increased after breaking the upper end of the trading range seen in late 2023,’ said Mamoru Shimode, chief strategist at Resona Asset Management, in an interview with Nikkei. ‘The Tokyo Stock Exchange’s initiatives to enhance capital efficiency have attracted overseas investors who view Japanese stocks as promising.’
