The Primary Stock index in Japan has surpassed the 40,000-point milestone for the first time, extending its swift ascent to record highs this year. This surge has been fueled by reforms in corporate governance and attractive valuations. Boosted by a rise in technology stocks mirroring their performance in the United States, the Nikkei share average climbed by 0.79 percent to reach 40,226.83 at the midday mark, breaking through the previous intraday peak of 39,990.23 reached on Friday.
Overseas investors appear to be leading the buying and many seem to be investing from a medium- to long-term perspective, said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management. "I think the market will continue to rise," he said.
The surge in Japanese technology stocks was propelled by the continued rally in artificial intelligence within U.S. stock markets, where both the S&P 500 and Nasdaq achieved unprecedented highs on Friday. Advantest, a manufacturer of chip-testing equipment and a supplier to U.S. artificial intelligence company Nvidia, saw a 3.9 percent increase. Tokyo Electron, a leading provider of chip-making equipment, also experienced a gain of 2.7 percent.
Shares in the aforementioned two companies contributed a total of 175 index points to the Nikkei's morning session surge of 316 points. Shin-Etsu Chemical, known for its production of semiconductor silicon products, saw a rise of 2.2 percent. JSR Corp, a prominent manufacturer of photoresists utilized in chipmaking, experienced a significant jump of 4.4 percent following reports in the media suggesting that Japan Investment Corp (JIC), a state-backed fund, intends to initiate a tender offer for its shares later this month.
The wider Topix index showed a 0.16 percent increase, reaching 2,713.79. Electric machinery emerged as the third-largest gainer among the Tokyo Stock Exchange's 33 industry sectors, rising by 1.2 percent. This followed gains in the pulp and paper sector, which climbed by 2.1 percent, and the mining sector, which saw a rise of 1.3 percent.