The Nikkei 225 is on track for a roughly 36% quarterly gain, its sharpest in records going back to 1965. A rebound in AI and chip stocks pushed the index above 64,000 points, while a yen near its weakest since 1986 amplified the run for Japan's exporters.
Japan's Nikkei 225 is closing the quarter with a roughly 36% rise, a pace not seen in six decades and the strongest in data going back to 1965. Technology shares led the advance, with chip and artificial intelligence names driving the benchmark to fresh record highs above the 64,000 mark.
AI and chips power the run
The climb has been broad and fast. The index set an all-time high earlier in the year and has kept rising since, leaving it up sharply against the same period in 2025. Analysts have tied the surge to renewed appetite for AI infrastructure and a recovery in semiconductor demand, the same forces lifting equity benchmarks elsewhere.
A weak yen flatters exporters
The yen has slumped to 162.27 per dollar, its weakest level since 1986, and a softer currency boosts the earnings of Japan's export-heavy index. Companies that sell abroad book stronger profits when overseas revenue converts back into a depreciated yen, a catalyst that has helped lift Tokyo stocks even as the slide rattles policymakers.
The same rate gap pressuring the yen — the Bank of Japan's low policy rate against far higher U.S. rates — has supported risk assets globally, and Tokyo's exporters rank among the clearest beneficiaries. A stronger yen, by contrast, could erode the earnings boost that has underpinned much of the quarter's gains.
What could test the gains
Surging risk appetite in one of the world's largest equity markets rarely stays contained. Japanese retail investors trade across both stocks and digital assets, and the record quarter for the Nikkei reflects the same risk-on mood that has at times lifted bitcoin and other cryptocurrencies. A weakening yen also strengthens the case some investors make for holding scarce assets as a hedge.
The relationship is far from mechanical, though. Equity rallies and crypto cycles can diverge sharply, and a sudden reversal in the yen carry trade has historically jolted both markets at once. With the rally leaning heavily on AI and chip stocks and on a weak yen, any shift in either — a technology pullback or a yen rebound — could test the momentum into the second half.
Source: Bitcoin.com News
Trading involves risk.
Risk Disclaimer
