Japan's Nikkei Reaches Intraday Record High Amid Hopes for US-Iran Deal

Japanese Stocks Surge as Markets Reopen After Holiday Break

Japanese stocks experienced a significant surge on their return to trading after a holiday break, driven by optimism surrounding a potential deal between the US and Iran to end their conflict. The tech-heavy Nikkei 225 Stock Average advanced as much as 5.5% to 62,799.19, while the broader Topix Index rose as much as 3.3% to 3,850.42.

The rally was also influenced by the stabilization of oil prices, which had plummeted 7% in the previous session. According to Takashi Ito, senior strategist at Nomura Securities, lower oil prices are significant for companies, as even a modest easing of inflation can provide meaningful relief.

Japanese equities have been gaining strength on the back of strong earnings from tech firms, with the Nikkei 225 topping the key psychological level of 60,000 last month. Tech shares are supporting the market in Tokyo, with US chipmaker Advanced Micro Devices Inc. rallying on bullish results. Memory chipmaker Kioxia's shares are set to rise by their daily limit, while semiconductor-related companies such as Renesas Electronics Corp and Ibiden Co. were among the top performers on the Nikkei 225 on Thursday.

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The rally reflects solid US earnings, not just from the "Magnificent Seven," but also from other sectors, according to Naoki Fujiwara, a senior fund manager at Shinkin Asset Management. This catch-up of several days' worth of gains is happening all at once, contributing to the surge in Japanese stocks.

US stocks hit new highs on Wednesday after Washington presented a memorandum of understanding that would gradually reopen the Strait of Hormuz and lift the blockade on ports, fueling optimism about a potential deal between the US and Iran.