Nikkei rises for fifth straight day, led by AI and nominal GDP growth

2026-08-17

AI and semiconductors lead

The Nikkei Stock Average rose for a fifth straight session in Tokyo trading on the 17th. It closed up 506 yen, or 0.74%, from the previous Friday at 69,220 yen. Selling came first after weaker U.S. shares on the previous Friday, but buying in leading artificial intelligence (AI) and semiconductor-related stocks supported the market.

Advantest and Tokyo Electron lifted the index. Key stock Kioxia Holdings recovered the 60,000 yen level for the first time in about three weeks and clearly rose above its 25-day moving average of 56,020 yen as of the 14th. There were also moments when the Nikkei turned lower after long-term interest rates reached the highest level in about 30 years, but overall the market remained firm. The Tokyo Stock Price Index (TOPIX), which had risen for eight straight sessions through the previous Friday, briefly topped its record high of 4,197.20 set on the 14th in the morning session.

Outlook supports gains

Market views remain strong that earnings for April-June 2026 will be the driver of higher share prices. In a report dated the 15th, JPMorgan Securities raised its TOPIX target for the end of 2026 to 4,600 from 4,400, citing better-than-expected results across a wide range of industries. Rie Nishihara said the Japanese stock market has a broad base and shows little sign of excessive positioning or valuation concerns, so investor interest is rising.

Nominal growth tailwind

Preliminary gross domestic product (GDP) data for April-June released by the Cabinet Office on the 17th showed real annualized growth of 1.1% from the previous quarter, excluding the effects of price changes, missing the 2.2% increase expected by the market in a QUICK survey. Koichi Fujishiro, chief economist at Dai-ichi Life Economic Research Institute, said the data suggests weakness in demand such as personal consumption and capital investment.

On a nominal basis, however, GDP rose 4.8% on an annualized basis to 687.7182 trillion yen, sharply above the 500 trillion yen range seen until a few years ago. Nominal GDP is considered highly correlated with the Nikkei Average, and Fujishiro said that while the real economy is weak, inflation has a larger positive effect on corporate earnings and stock markets. The trend of a bullish market amid a sluggish economy backed by strong earnings is likely to continue.

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