Nikkei Breaks 71,000 Mark for the First Time... AI Rally Even the Fed Couldn't Stop

37%) from the previous trading day. The photo shows a citizen looking at an electronic display board at a securities firm in Tokyo on the 25th of last month. Photo = Newsis 【Financial News Tokyo = Correspondent Seo Hye-jin】 The Nikkei 225 Average (Nikkei Index), the representative index of the Japanese stock market, broke through the 71,000 mark for the first time during trading on the 18th. Strong growth expectations for the artificial intelligence (AI) and semiconductor industries outweighed concerns over the U. S.
Federal Reserve's interest rate hike. 65%) from the previous trading day. The intraday gain exceeded 1,400 points, setting a new all-time high. Until the previous day, market sentiment was not favorable.
Although the U. S. Federal Reserve kept the benchmark interest rate unchanged at the Federal Open Market Committee (FOMC) meeting on the 17th (local time), half of the members predicted further rate hikes within the year, signaling the possibility of a prolonged tightening. In the U.
S. stock market, major indices such as the Dow Jones Average and the Standard & Poor's (S&P 500) index fell across the board. However, the Japanese stock market showed the exact opposite trend. This is because investors' attention has focused on the AI ​​growth story rather than interest rates.
In particular, expectations for the entire semiconductor sector expanded as the U. S. semiconductor company Intel announced the start of trial production of products based on next-generation advanced processes. The strength of the U.
S. Philadelphia Semiconductor Index (SOX) carried over to the Japanese market. On this day, Murata Manufacturing surged more than 18% during trading, recording its highest price since listing. SoftBank Group also rose by over 5%, and buying pressure concentrated on major semiconductor-related stocks such as Tokyo Electron and Ibiden.
It was estimated that these stocks alone pushed the Nikkei Index up by approximately 700 points. Securities firms are also raising target prices for AI-related stocks. SMBC Nikko Securities upgraded Murata Manufacturing's investment rating to the highest level, and Iwai Cosmo Securities raised its target price for SoftBank Group. The outlook reflects the forecast that demand for Multilayer Ceramic Capacitors (MLCCs) and semiconductor components will explode due to the proliferation of AI servers.
The robust growth of the U. S. economy also supported investor sentiment. U.
S. 9% compared to the previous month, significantly exceeding market expectations. As concerns about an economic slowdown ease, expectations are growing that big tech companies will continue their investments in AI. The easing of risks in the Middle East also acted as a positive factor.
International oil prices declined as the U. S. and Iran signed a memorandum of understanding to end hostilities. West Texas Intermediate (WTI) fell to the $75 per barrel range, raising expectations for reduced cost burdens for companies.
Analysis suggests that as conviction grows that AI is driving a new industrial revolution, the influence of interest rate variables is weakening compared to the past. In fact, the Nikkei index has continued its steep rally, rising by over 5,700 points in the past five trading days. Investors appear to be paying more attention to increased investment in AI infrastructure and rising demand for semiconductors than to whether the Fed will further tighten monetary policy. On Wall Street and in the Tokyo stock market, there are even assessments stating that "expectations for AI growth are stronger than a hawkish Fed.
"
37%) from the previous trading day. The photo shows a citizen looking at an electronic display board at a securities firm in Tokyo on the 25th of last month. Photo = Newsis 【Financial News Tokyo = Correspondent Seo Hye-jin】 The Nikkei 225 Average (Nikkei Index), the representative index of the Japanese stock market, broke through the 71,000 mark for the first time during trading on the 18th. Strong growth expectations for the artificial intelligence (AI) and semiconductor industries outweighed concerns over the U. S.
37%) from the previous trading day. The photo shows a citizen looking at an electronic display board at a securities firm in Tokyo on the 25th of last month. Photo = Newsis 【Financial News Tokyo = Correspondent Seo Hye-jin】 The Nikkei 225 Average (Nikkei Index), the representative index of the Japanese stock market, broke through the 71,000 mark for the first time during trading on the 18th. Strong growth expectations for the artificial intelligence (AI) and semiconductor industries outweighed concerns over the U. S.
sjmary@fnnews.com Seo Hye-jin Reporter