Key points

  • According to Business Recorder, Japan's Nikkei share average rose 2.88 percent to reach 60,471.05 by 0158 GMT on Tuesday.
  • Technology investor SoftBank Group surged 14.38 percent, while chip-related Advantest and Tokyo Electron gained 4.93 percent and 5.66 percent respectively.
  • The broader Topix index increased by 2.27 percent to 3,904.67.

Japanese equities fought back from a sharp tech-led selloff on Tuesday as artificial intelligence-related stocks staged a notable recovery, according to Business Recorder. The rebound helped the market claw back the majority of its losses from late last week.

Key Details

Business Recorder reported that the Nikkei's sharp gains in the latest two sessions caught market observers by surprise. Kazuaki Shimada, chief strategist at IwaiCosmo Securities, was quoted by Business Recorder as saying, 'The Nikkei's sharp gains in the latest two sessions are a surprise.' Shimada added that gains would likely remain limited, noting that investors 'would not want to bet the Nikkei to cross 61,000.'

The previous selloff saw the Nikkei drop nearly 6 percent amid concerns that the US Congress could slow down artificial intelligence investments following the Democrats' midterm election victory, Business Recorder noted. Despite a 4.2 percent overnight drop in Nvidia shares linked to controversy surrounding CEO Jensen Huang, Asian tech stocks performed strongly. Shimada observed that the market currently views the issue as isolated to Nvidia rather than the wider industry.

Individual stocks saw substantial movement on Tuesday. SoftBank Group jumped 14.38 percent, Advantest rose 4.93 percent, Tokyo Electron climbed 5.66 percent, and memory-chip maker Kioxia advanced 7.6 percent. Tokyo Stock Exchange data cited by Business Recorder showed that outstanding margin-buying positions declined to 48.22 million shares from 52.85 million a day earlier, as investors sold shares to avoid margin calls.

Context and Impact

Kioxia remains a significant driver of the Nikkei's recent trajectory, holding a prominent share of outstanding margin-buying positions after previously fueling the index's rally to record highs.

Summary and What Next

Tuesday's trading session demonstrated strong resilience among Japanese technology equities following recent political and sector-specific jitters in the United States. Market participants continue to monitor US developments closely to gauge future artificial intelligence investment trends.