Japan's Nikkei posts 3-month closing high as AI shares rally

By Reuters News
A visitor stands next to an electronic screen displaying Japan's Nikkei stock prices quotation board inside a conference hall in Tokyo, Japan March 4, 2026. REUTERS/Issei Kato

By Junko Fujita

TOKYO, Oct 5 (Reuters) - Japan's Nikkei share average posted a three-month closing high on Monday, driven by AI-related stocks after Wall Street's gains at the end of last week.

The Nikkei .N225 rose 2.4% to 69,946.4, its highest close since July 1. The broader Topix .TOPX rose 1.33% to 4,145.22.

"Investors scooped up AI-related stocks, but market sentiment is muted compared with earlier this year when the Nikkei hit a record high," said Mamoru Shimode, chief strategist at Resona Asset Management.

"The AI rally will continue, but markets will be more selective."

US stocks advanced on Friday after weaker-than-expected jobs data dampened expectations of a Federal Reserve interest rate hike later this month. .N

In Japan, chip-related Advantest 6857.T and Tokyo Electron 8035.T rose 4,32% and 5.5%, respectively, on Monday to provide the biggest boosts to the Nikkei. Technology investor SoftBank Group 9984.T rose 2.96%.

Memory chip maker Kioxia 285A.T rose 0.94%, but was nearly 50% below the record high set in mid-June.

"Investors probably tried to buy Kioxia shares on the rise, but at the same time others who have losses in the shares sold stocks on a rally, which is why their gains are limited," Shimode said.

Bank shares rose, with Mitsubishi UFJ Financial Group 8306.T and Mizuho Financial Group 8411.T up 2% and 2.63%, respectively.

The Topix growth share index .TOPXG rose 1.43%, while the value share index .TOPXV gained 1.23%.

Of the more than 1,500 stocks on the Tokyo Stock Exchange's prime market, 55% rose, 40% fell, and 3% traded flat.

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