SoftBank's AI Surge Propels Nikkei to Historic Heights Amid Mixed Market Sentiment

On Thursday, the Nikkei 225 Index surged to a historic peak, predominantly driven by SoftBank Group's remarkable performance. The market's optimism towards AI-driven cloud business growth has significantly boosted SoftBank's stock, aligning with its American counterparts. The Nikkei 225 Index advanced 0.8% to close at 44,198.10 points, after reaching an intraday high of 44,251.65 points. In contrast, the broader Topix Index remained steady at 3,149.38 points.

Yugo Tsuboi, Chief Strategist at Daiwa Securities, highlighted that Oracle's soaring stock price, following the company's announcement regarding heightened demand for its cloud services, has spurred expectations for continuous growth in cloud business sectors. This development has positioned SoftBank Group as a major contributor to the Nikkei's rise. Oracle's stock witnessed an unprecedented single-day surge of 36%, marking its largest jump since 1992. This news also propelled the S&P 500 and Nasdaq Composite to close at record highs on Wednesday.

Amid the tech-driven rally, SoftBank Group saw its shares climb 9%, while Advantest, a manufacturer of chip testing devices, recorded a 3.54% rise. Similarly, Fujikura, a recognized barometer for data center investments, experienced a 4% increase. In contrast, the banking and insurance sectors faced declines, with the banking sector decreasing by 0.99% and the insurance sector falling by 1.09%, marking these as the poorest performers among Tokyo Stock Exchange's 33 industry indices.

Yugo Tsuboi also pointed out that not all investors are entirely bullish on Japan's stock market. If there were greater confidence in Japan's economic outlook, it would likely reflect positively on the banking stocks, which have shown weakness today. This indicates a mixed sentiment regarding Japan's economic prospects.