nikkei soars to unprecedented heights: what's driving the tokyo surge?

nikkei soars to unprecedented heights: what's driving the tokyo surge?

2025-09-22 general

tokyo, Monday, 22 September 2025.
the tokyo stock exchange is making headlines. The nikkei average hit a record high of 45,493.66 yen. Semiconductor stocks are leading the charge. Foreign investment is pouring in. Anticipation of us interest rate cuts and a robust us economy are key factors. The bank of japan’s etf sale decision may be a catalyst for corporate reform. Even samsung electronics in south korea is benefiting from nvidia’s recognition. What does this mean for global markets?

market performance

On September 22, 2025, the Nikkei Average closed at 45,493.66 yen, a rise of 447.85 yen, or 0.99%, from the previous week [1][2][3]. This marked an update to the prior high of 45,303.43 yen recorded on September 18 [3]. The surge reflects continued buying spurred by expectations of interest rate cuts by the U.S. Federal Reserve, reinforcing the view that the U.S. economy will remain robust [3]. The increase was broad-based, with the TOPIX also climbing by 15.49 points to reach 3163.17 [6].

semiconductor sector strength

Semiconductor-related stocks, including Tokyo Electron and Lasertec, experienced significant gains [3]. TDK and other electronic component stocks also rose, influenced by reports of strong pre-orders for Apple’s new iPhone [3]. The South Korean KOSPI also saw gains, closing at 3468.65, a 0.679 0.67% increase, driven by Samsung Electronics’ advancements in high-bandwidth memory (HBM) recognized by Nvidia [4]. This performance underscores the global impact of technological advancements and their effect on equity valuations [4].

analyst perspectives

According to Okasan Securities’ senior sales trader, Shojiro Sakamoto, domestic institutional investors are selling due to high valuations and quarter-end factors, while overseas long-term investors are buying undervalued stocks [3]. Mizuho Securities’ chief equity strategist, Masatoshi Kikuchi, believes the Bank of Japan’s decision to sell its ETF holdings was a surprise in timing but was carefully designed to minimize the impact on the overall Japanese stock market [3]. The BOJ’s decision to sell ETFs is expected to take over 100 years to complete, limiting its immediate impact on market sentiment [3].

etf sales and market impact

The Bank of Japan’s decision to gradually sell its ETF holdings is viewed as a move that will have a limited, controlled impact on the market [3][7]. While the actual selling process may take a century, the announcement is seen as a signal towards corporate reform, which could further bolster market sentiment [3]. Despite initial concerns, the market has largely absorbed this news, focusing instead on the positive momentum from U.S. economic factors and the strength of key sectors like semiconductors [3].

The Tokyo Stock Exchange Growth Market 250 Index also saw gains, closing at 774.98, a 0.257 0.26% increase [5]. This rise was attributed to short-term money flows capitalizing on the strong performance of the Nikkei Average and speculation surrounding the Liberal Democratic Party presidential election [5]. However, gains were trimmed in the afternoon, suggesting a cautious approach among investors in the emerging market sector [5]. The market anticipates the lower limit of the Nikkei 225’s expected range to be 44,600 yen [7].

future outlook and fomc

Looking ahead, market analysts are closely monitoring the upcoming Federal Open Market Committee (FOMC) meeting scheduled for September 24, 2025 [7]. An analyst at Global Securities noted the semiconductor sector’s phenomenal growth but emphasized the importance of monitoring the potential impact of the FOMC’s decisions [7]. The next Bank of Japan policy meeting is scheduled for October 2025 [7]. The Nikkei is expected to trade within a range of 44,600 yen to 46,000 yen in the coming week, balancing bullish sentiment with caution [7].

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semiconductors stock market