Nikkei 225 Hits Record High as SoftBank Rises for Fifth Straight Day

Up 2.15% from Previous Session, Closing at 42,718

AFP Yonhap News

Boosted by news of an extension to the tariff truce between the United States and China, the Japanese stock market hit an all-time high on August 12.

The Nikkei 225 Average (hereafter, the Nikkei Index), Japan's benchmark stock index, closed the day at 42,718, up 2.15% from the previous trading session. This surpassed the previous record closing high of 42,224 set on July 11 last year, breaking the record after about a year. During intraday trading, the index climbed as high as 42,999, coming close to the 43,000 mark.

Earlier this April, the Nikkei Index had fallen to the 31,000 level due to concerns that global economic growth would slow amid U.S.-China trade tensions. However, it rebounded, led by semiconductor-related stocks, as expectations grew for generative artificial intelligence (AI).

Among individual companies, semiconductor-related stocks such as SoftBank Group, Advantest, and Tokyo Electron, as well as trading companies including Mitsui & Co., led the overall market. In particular, CNBC reported that SoftBank Group led the rally by rising for five consecutive trading days.

The Nikkei newspaper analyzed, "Reduced anxiety over U.S. tariff policy and expectations for improved corporate earnings are supporting the rise in stock prices." The paper also noted that the U.S.-Japan tariff negotiations concluded quickly and that there were no negative surprises in Japanese companies' April-June earnings announcements.

NHK reported, "The announcement by the United States to extend the grace period for some additional tariffs on Chinese imports has fueled the view that the U.S. and China have avoided trade confrontation, which also contributed to the rise in stock prices."

The exchange rate also played a role. Kyodo News explained that the dollar-yen exchange rate in the Tokyo foreign exchange market rose by about one yen from the previous trading day to the 148-yen level, providing a tailwind for stock prices. The agency added, "Against the backdrop of the historic weakness of the yen, export-related stocks performed strongly."