Japanese stocks closed mixed on the 22nd, with the Nikkei 225 index falling 116.59 points (0.18%) to 66,115.60 while the TOPIX index rose 18.18 points (0.45%) to 4,033.13. Morning buying in AI and semiconductor stocks pushed the Nikkei above 67,000 intraday, supported by Middle East instability and news that Taiwan's TSMC would raise chip prices up to 10% from next year according to Nikkei Asia. The index reversed to decline in afternoon trading as profit-taking emerged in semiconductor stocks and overseas buying momentum slowed, with SoftBank Group and Tokyo Electron dropping around 1% despite gains of over 7% in Taiyo Yuden and over 5% in Ibiden.
AI and Semiconductor Stocks Drive Morning Rally
Buying flowed into AI and semiconductor-related stocks from early morning trading on the 22nd, with the Nikkei 225 recovering the 67,000 level during the session. Kazuaki Shimada, chief strategist at Iwai Cosmo Securities, stated that "funds are concentrating in AI-related stocks with bright earnings growth prospects as it becomes difficult to predict the impact of worsening Middle East conditions on the Japanese economy." Nikkei Asia reported that TSMC would raise chip prices for contract manufacturing by up to 10% from next year. The market interpreted the price increase as reflecting strong semiconductor demand, spreading buying in related stocks.
Profit-Taking Reverses Nikkei to Decline in Afternoon Session
The Nikkei 225 reduced gains entering afternoon trading and reversed to decline near the close, falling back to the 66,000 level. Taiyo Yuden and Ibiden rose over 7% and 5% respectively near the close, but SoftBank Group and Tokyo Electron fell around 1%. The reversal was attributed to profit-taking in some semiconductor stocks that had risen from early morning and slowing overseas buying momentum that had led the morning rally. Jun Ishigane, executive officer at Mitsubishi UFJ Asset Management, stated that "concerns still exist" but added that "this does not mean the trend of strengthening AI datacenter investment has ended." Hideyuki Ishiguro, chief strategist at Nomura Asset Management, said that "intensifying competition itself is a positive signal for the technology industry" and noted that "accelerated competition when DeepSeek emerged in the past led to expanded investment." Market participants are focusing on hyperscaler earnings announcements starting from the 22nd US time.
Japanese Government Bond Yields Close Mixed
Japanese government bond yields closed mixed on the 22nd. The 10-year JGB yield traded at 2.7423% as of 3:32 PM, up 1.37 basis points from the previous session. The 30-year yield rose 0.37bp to 3.8943%, while the 2-year yield fell 0.19bp to 1.4421%. The 40-year JGB auction conducted by Japan's Ministry of Finance in the afternoon recorded a bid-to-cover ratio of 2.82 times, exceeding both the prior result and the 12-month average. The 40-year yield rose around the auction but traded at 3.8903%, down 0.63bp, at the same time.
FAQ
How did the Nikkei 225 perform on the 22nd?
The Nikkei 225 index closed down 116.59 points (0.18%) at 66,115.60 on the 22nd. The index recovered above 67,000 during morning trading due to buying in AI and semiconductor stocks, but reversed to decline in the afternoon session due to profit-taking.
What drove the morning rally in Japanese stocks on the 22nd?
AI and semiconductor-related stocks attracted buying from early morning on the 22nd, supported by Middle East instability and news that TSMC would raise chip prices by up to 10% from next year according to Nikkei Asia. The market interpreted TSMC's price increase as reflecting strong semiconductor demand.
