Tech Drives Nikkei to 2-Week Closing High after Trump’s AI Investment Plans (UPDATE 1)

Reuters

13:01 JST, January 22, 2025 (updated at 16:40 JST)

TOKYO (Reuters) – Japan’s Nikkei share average posted a two-week closing high on Wednesday, powered by SoftBank Group and other technology stocks after U.S. President Donald Trump announced a private sector investment of up to $500 billion to fund AI infrastructure.

The Nikkei ended 1.58% higher at 39,646.25, its highest close since Jan. 8, in a three session rally.

Trump said that ChatGPT’s creator OpenAI, SoftBank Group and Oracle are planning a joint venture called Stargate, which he said will build data centers and create more than 100,000 jobs in the United States.

“Today’s market is dominated by the news about Trump’s AI investment announcement. Investors have already shrugged off concerns about his tariff plans and instead focused on positive elements,” said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.

Tech start-up investor SoftBank Group jumped 10.6%, providing the biggest boost to the Nikkei. Chip-testing equipment maker Advantest, a supplier to Nvidia , rose 4% and chip-making equipment maker Tokyo Electron gained 1.68%.

Makers of materials for data centers also rose, with Fujikura and Furukawa Electric surging 14.82% and 12.54%, respectively, to become the top percentage gainers on the Nikkei.

The broader Topix rose 0.87% to 2,737.19, posting a smaller gain than the Nikkei as financial stocks fell.

Insurer Tokio Marine Holdings fell 1.71% and Dai-ichi Life Holdings lost 2.23%.

Banks fell, with Mizuho Financial Group and Sumitomo Mitsui Financial Group slipping 0.35% and 0.76%, respectively.

Topix’s growth index, which tracks high-flying technology shares, rose 1.26%, while the value share index for companies with smaller growth but higher dividend payouts, gained 0.51%.

Of the more than 1,600 shares trading on the Tokyo Stock Exchange’s prime market, 63% rose and 31% fell, with 4% flat.