Japan's benchmark NI225 rebounded strongly on Tuesday, rising 2.17% to 65,416.63 after suffering its largest one-day decline in three months during the previous session. The broader TOPIX also advanced 1.14% to 3,896.11, reflecting renewed investor confidence in technology and semiconductor-related shares.
The recovery was led by major chip equipment makers. Tokyo Electron surged 8.91%, while Advantest gained 4.34%. These two companies contributed the largest positive impact to the Nikkei as investors returned to AI-related stocks following Monday's sharp selloff.
Other technology names also recovered. SoftBank Group reversed earlier losses to finish 1.03% higher, while Fujikura climbed 2.23%. Market strategists noted that enthusiasm surrounding artificial intelligence remains strong despite recent volatility, although investors remain cautious after the rapid gains seen in technology stocks this year.
Some analysts suggested that part of the recent market weakness may have been linked to investors raising cash ahead of the highly anticipated IPO of SpaceX later this week. The Nikkei had previously surged to record highs above 68,000 earlier this month on optimism surrounding AI-driven growth and remains up nearly 30% year-to-date despite recent fluctuations.
Financial stocks also performed well as investors increasingly expect the Bank of Japan to raise interest rates at its upcoming policy meeting. Shares of Mitsubishi UFJ Financial Group rose 0.38%, while Mizuho Financial Group gained 1.69%, benefiting from expectations of higher interest rates.
Not all stocks participated in the rally. Fast Retailing, the owner of the Uniqlo brand, declined 0.96%, making it the largest drag on the Nikkei index. Market breadth remained positive overall, with 53% of stocks advancing, 42% declining, and the remainder closing unchanged.
The rebound suggests that investors continue to view the recent selloff as a temporary correction rather than a change in the broader bullish trend, particularly as demand for AI-related technologies remains a dominant theme in global equity markets.
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