Japan's Nikkei rises 2% as AI stocks rally, Middle East worries cap gains

Japan's Nikkei share average rose on Monday, following ​up on AI and ​chip-linked stocks' gains on Wall Street, with uncertainties surrounding the ​Middle East conflict capping gains. The Nikkei was up 2% at 66,927.61 as of 0126 GMT and the broader Topix edged up 0.44% to 4,092.93.

"Gains of chip-related stocks supported ‌the Nikkei. ⁠Easing bets ⁠for the U.S. Federal Reserve's rate hike were the driver," said Daisuke Hashizume, senior strategist at Daiwa Securities. U.S. stocks advanced on Friday, with the S&P closing at a record high to cap off a strong week of gains for the major indexes, after data showed the U.S. economy unexpectedly shed jobs last month and dampened expectations the Fed would raise ⁠interest rates at ‌its September meeting. In the Middle East, uncertainty continued over the reopening of the Strait of Hormuz as Iran said ⁠a deal with Oman defining new shipping lanes was in its final stages, but the U.S. must still meet other conditions.

In Japan, chip-related Advantest and Tokyo Electron rose 5.3% and 3.4%, respectively.


Fujikura was up 7%, extending a sharp rally after the fibre-optic cable maker raised its annual net profit forecast on Friday.

Ibiden, a supplier to AI bellwether Nvidia , rose 6.28%. Shares of Recruit Holdings were untraded ‌with a glut of buy orders after the staffing agency's revised annual forecasts beat market expectations. The shares were bid ​at a daily ​limit high of 16,165, ⁠or 22.79% higher from the previous session's close.

Investors stayed away from active trade as Japan is in the midst of the "obon" summer holidays and toward ​the end of the week, the main indexes will show little direction on the dearth of market-moving cues, Daiwa's Hashizume said.

Uniqlo-brand owner Fast Retailing edged 0.23% lower.

Mitsui Kinzoku, a maker of materials for lithium-ion batteries, tanked 17% after its revised annual net profit forecast failed to meet market expectations.