Nikkei hits new high: is fiscal policy the key?

2025-09-24 general

tokyo, Wednesday, 24 September 2025.
The Tokyo Stock Exchange closed higher for the second day. The Nikkei average rose 0.30% to 45,630.31 yen. This surge reflects growing anticipation for fiscal expansion under the upcoming administration. SoftBank Group’s planned large-scale investments in US artificial intelligence further boosted the market. One company alone pushed the Nikkei up more than 200 points. Despite initial selling pressure from US stock declines, strategic buying drove the market to new heights. The question remains if these gains will continue.

Fiscal policy speculation drives market

The Nikkei’s rise is significantly influenced by speculation around the next administration’s fiscal policies [1]. A public debate among Liberal Democratic Party presidential candidates fueled expectations of fiscal expansion, encouraging buying [1]. Daichi Securities’ Hiroaki Tsuboi noted that the anticipated fiscal expansion from the next government is a supportive factor for the stock market [1]. Investors are betting on policies that could further stimulate the economy, increasing the attractiveness of Japanese equities.

SoftBank’s AI investment impact

SoftBank Group (SBG) played a crucial role in the Nikkei’s upward momentum [1][3]. SBG’s announcement of a plan to establish five new artificial intelligence (AI) data centers in collaboration with Oracle and OpenAI drove its stock to a record high [1]. SBG’s surge alone contributed over 200 points to the Nikkei average [1]. This highlights the significant impact of major tech companies and AI-related investments on the overall market sentiment and index performance.

Market breadth and sector performance

The tokyo stock price index (topix) also saw gains, rising 0.23% to 3,170.45, marking its highest level in about a week [1]. The jpx prime 150 index similarly advanced, reaching a new high [1]. Trading volume on the Tokyo Stock Exchange’s Prime market reached approximately 6.0051 trillion yen, with 1.92 billion shares traded [1]. There were 734 rising issues and 820 declining issues [1]. Sectors such as electric appliances and precision instruments showed gains, while others such as services and retail experienced declines [1].

Expert opinions and market outlook

Despite initial dips due to concerns over the US stock market, strong underlying demand emerged [1]. Yoshitaka Sakai, general manager of the stock investment department at Asset Management One, suggests that the positive supply-demand dynamics, including corporate share buybacks, should sustain the Nikkei’s upward trend [1]. However, technical analyst Tomoyuki Ito suggests that if the Nikkei cannot break through the September 19 high of 45,852 yen, it may decline below 45,045 yen [7]. Investors should be aware of both bullish and bearish signals.

Key stocks influencing the market

Individual stocks significantly impacted the Nikkei’s performance [8]. IHI, SoftBank Group, and Mitsubishi Heavy Industries were among the top contributors to the index’s gains [8]. Conversely, Tokyo Electric Power Holdings, Nexon, and Socionext were among the significant decliners [8]. These movements reflect sector-specific trends and company-specific news influencing investor sentiment. Investors should closely monitor these key stocks to gauge the overall health and direction of the market.

Bronnen

stock market fiscal policy