AI-Led Rally Continues to Drive Nikkei Stock Average

Tokyo, June 18 (Jiji Press)–Japan’s benchmark Nikkei 225 stock average closed above 70,000 for the first time Thursday, but the rally has remained heavily concentrated in artificial intelligence-related stocks, with about 30 pct of its components still below their levels at the end of last year. The key index has climbed from 60,000 to above 70,000 in less than two months, with the pace of the rally accelerating. Still, an official at a major brokerage firm said, “Japanese stocks are not as strong as the Nikkei average suggests.” After the Nikkei closed above 40,000 for the first time on March 4, 2024, it took more than a year and a half to end above 50,000 yen, on Oct. 27, 2025. The pace of increase accelerated later, with the index closing above 60,000 on April 27 this year, or about six months later, before ending above 71,000 on Thursday. The stocks that drove the Nikkei higher in such a short period were those related to semiconductors and electronic components, which are benefiting from the boom in AI data center construction. About half of the index’s advance from April 28 to Thursday can be attributed to just three stocks, namely Tokyo Electron, Kioxia Holdings and SoftBank Group. Looking ahead, a market analyst from a private think tank said, “The market rally led by high-tech stocks is likely to continue,” adding that “it’s unclear what would cause the index to stop rising or where it would stop advancing.” Quite a few stocks are being left behind in this bull market. As of Thursday, about one-third of the Nikkei 225’s component stocks remained below their levels at the end of last year, including leading Japanese companies such as Toyota Motor and Nintendo. “Globally, investment funds are flocking to AI-related stocks, making it difficult for stock indexes to accurately reflect the real economy,” said an investment advisory firm. END [Copyright The Jiji Press, Ltd.]