Key Points
- Nikkei 225 closed 0.43% higher at 51,063.31, while the Topix jumped 1.14% to a record high of 3,359.33.
- Sony gained 3.67% after raising its annual profit forecast by 8%, and Mitsui Kinzoku surged 23.27% on a 75% profit upgrade tied to AI infrastructure demand.
Japan’s Nikkei index extended gains on Wednesday, closing up 0.43% at 51,063.31, as investors rotated into sectors with strong earnings outlooks despite early weakness in heavyweight technology names. The broader Topix hit a record close of 3,359.33, powered by industrials and financials.
Sentiment was initially dampened by SoftBank Group’s 10% intraday slump after disclosing a $5.8 billion sale of its Nvidia stake.
However, the stock later pared losses to close down 3.46%, easing pressure on the broader index.
Chip-related names remained mixed, with Advantest down 0.23% and Tokyo Electron off 1.55%, as profit-taking continued following a strong run earlier this quarter.
Corporate Earnings Drive Optimism
Earnings season continued to dominate flows. Sony Group jumped 3.67% after lifting its operating profit forecast for the fiscal year ending March 2026 by 8%, buoyed by strong demand for gaming and audio products.
AI-linked optimism also persisted. Mitsui Kinzoku, a materials supplier to data centres, soared 23.27% after upgrading its annual profit outlook by 75%. Analysts said the move reignited investor enthusiasm for Japan’s AI and semiconductor ecosystem.
TDK gained 4.92% to become the largest contributor to Nikkei gains, while Chugai Pharmaceutical rose 4.37% on resilient healthcare demand.
Technical Analysis
The Nikkei 225 is trading around 51,171, stabilising after a choppy session that saw the index dip to 50,559 before rebounding.
On the 15-minute chart, price action shows the Nikkei attempting to reclaim short-term momentum, with moving averages (5, 10, 30) beginning to tighten after a sharp intraday selloff.
The MACD has crossed above the signal line, reflecting a mild recovery in buying pressure, though the histogram suggests momentum remains tentative for now.
The move coincides with broader Asian sentiment improving after U.S. futures steadied and traders digested fresh comments from the Bank of Japan, which reiterated its commitment to a gradual policy normalisation path.
Cautious Forecast
Meanwhile, speculation around Trump’s trade approach toward Asia continues to weigh slightly on export-heavy sectors, tempering gains across the Tokyo exchange.
A sustained break above 51,250 could confirm a short-term bullish reversal, opening the way toward 51,500, while failure to hold above 50,900 risks a renewed slide back to 50,500. With volatility lingering ahead of key U.S. CPI data, the Nikkei may continue oscillating within this range until traders gain clearer direction on global risk appetite.
