Equity markets across Asia experienced a powerful rally on Monday, with Japanese stocks leading the charge by soaring over 5% to a record high. The surge was fueled by a significant rebound in risk sentiment, driven by lingering enthusiasm from SpaceX's recent initial public offering (IPO) and relief over the anticipated reopening of the Strait of Hormuz.
The Nikkei 225 index skyrocketed 5.4% within the first 90 minutes of trading, reaching 69,600 points—a level far exceeding many market strategists' projections for the entire year.
Simultaneously, the broader Topix index, which tracks thousands of companies listed in Tokyo, decisively broke through the significant 4,000-point barrier.
Oil prices declined sharply on Monday after U.S. President Trump announced that an agreement had been reached with Iran to reopen the critical maritime passage. Brent crude fell nearly 4%, dropping below $84 per barrel.
In other regional markets, South Korea's benchmark KOSPI index surged close to 6%. This index is widely viewed as a key indicator of global investor sentiment toward artificial intelligence infrastructure investments. Samsung Electronics Co Ltd shares gained over 5%, while rival chipmaker SK Hynix Inc closed nearly 7% higher.
In Tokyo, capital flowed predominantly into core companies within the semiconductor, artificial intelligence, and data center sectors. Shares of Murata Manufacturing Co Ltd jumped 17%, and SoftBank Group Corp rose more than 12%.
Shares of Japan's two major airlines, Japan Airlines Co Ltd and ANA Holdings Inc, also soared in unison. The anticipated resumption of traffic through the Strait of Hormuz, which is expected to ease price and supply concerns for jet fuel, boosted investor sentiment toward the aviation sector, which has been under pressure for months due to flight cancellations and soaring ticket prices.
The standout performer remained Japan's largest flash memory manufacturer, Kioxia Holdings Corp. Over the past 12 months, its share price has skyrocketed more than 43-fold.
The former Toshiba Memory business surged 10.9% on the day, with its market capitalization approaching 50 trillion yen (approximately $312 billion), propelling it to become Japan's most valuable listed company.
Bruce Kirk, a Goldman Sachs equity strategist covering Japan, stated that the prevailing market trend remains investors' continued allocation to AI-related stocks, with the Tokyo market also absorbing investment capital flowing from other parts of Asia.
Kirk noted that investors, already heavily positioned in technology stocks in smaller markets like South Korea, are now eager to further increase their exposure to the Asian tech sector and are shifting toward more liquid assets. "In this context, the Japanese equity market has become the only viable choice," he said.
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