[Nikkei Average Recovers to 70,000 Yen Level] AI and Semiconductor Stocks Lead the Market, While Real Estate and Transportation Face Selling; Future Focus is on the 'Impact of …

In the Tokyo stock market, the Nikkei Stock Average has recovered to the 70,000 yen level for the first time in about three months. AI and semiconductor-related stocks led the rise, driving the market higher.

On the other hand, the market as a whole is not uniformly strong, with notable declines in sectors sensitive to the domestic economy, such as real estate and transportation.

Although the stock price has recovered to a major milestone, cautious views regarding future market trends are spreading. Of particular note is the impact that rising interest rates will have on corporate earnings and stock prices.

AI and semiconductor-related stocks lead the stock price rise

At the start of the week in the Tokyo market, the Nikkei Stock Average opened in the 69,000 yen range.

Subsequently, buying spread to AI and semiconductor-related stocks, causing prices to rise immediately after the start of trading. It recovered to the 70,000 yen level around 10:30 a.m.

However, profit-taking selling emerged in the afternoon, and the market ultimately closed at 69,946 yen, up 1,637 yen from the previous day.

There are considered to be two main factors supporting this stock price rise.

The first is that concerns about additional interest rate hikes in the United States have receded.

Since the employment statistics released at the end of last week showed that the increase in the number of employed persons was lower than market expectations, the view has strengthened that U.S. financial authorities may not be in a hurry to raise interest rates.

Additionally, the temporary decline in crude oil futures prices also served as a factor supporting investor sentiment.

Market shows mixed results; selling pressure on real estate and transportation

The rise in stock prices this time was led by AI and semiconductor-related stocks.

On the other hand, in sectors with deep ties to the domestic market, such as real estate and transportation, there were notable declines in stock prices.

The market is seeing a divergence in stock price reactions depending on the sector.

Tomoichiro Kubota, Chief Market Analyst at Matsui Securities, points out that while the upward trend is expected to be maintained, attention must be paid to interest rate trends.

“I believe the upward trend will be maintained, but what we must be careful about is the rise in interest rates.”

He notes that while AI-related companies can cope with the impact of rising interest rates due to their profitability, changes in interest rate levels could become a burden for industries and companies that have been supported by a low-interest-rate environment until now.

Rising interest rates become a key point for the future market

Although the stock price has recovered to a major milestone, the interest rate environment is likely to be a major factor in whether the rise continues in the future.

In particular, for companies and industries that have grown on the premise of low interest rates, the increase in borrowing costs and changes in the investment environment may affect their performance.

While AI and semiconductor-related stocks are supporting the market, how will the impact of rising interest rates on companies spread?

In the Tokyo stock market going forward, the trends in monetary policy and corporate earnings will be the focus of attention.