Nikkei Breaches 65,000! AI Stocks Drive Japanese Market Surge

The Japanese stock market saw a sharp rally during Wednesday’s trading session (October 21, 2026), with the Nikkei 225 index jumping approximately 2% to break through the 65,000-point mark. This gain marks a recovery from a one-month low, fueled by growing investor interest in artificial intelligence (AI)-related technology stocks. Positive sentiment was bolstered by strong financial results from server manufacturer Super Micro Computer, while growth in AI-driven businesses and SpaceX’s satellite internet operations further boosted optimism regarding the global technology sector’s outlook.

The rally was led by several Japanese tech stocks: Kioxia Holdings surged 5.1%, Advantest rose 4.8%, and SoftBank Group climbed 3.5%. Shares of Lasertec and Taiyo Yuden also saw gains, rising 3.2% and 2.7%, respectively. The banking sector also strengthened, with Mitsubishi UFJ up 1.6% and Sumitomo Mitsui gaining 1.4%. Meanwhile, Japanese export data for September showed growth of 16.7%—falling short of the 20.1% forecast and marking the slowest pace of growth since April.

Despite the slowdown in export growth, Japan’s foreign trade has now recorded gains for 13 consecutive months, driven primarily by demand for semiconductors and AI-related products. This underscores the technology sector’s role as a vital engine for the Japanese economy. Looking ahead, the sustainability of the Nikkei’s momentum will depend on the outlook for AI investment, the performance of technology firms, and broader global economic developments. Should optimism surrounding AI continue to build, the Nikkei may well sustain its upward trajectory. However, slowing exports and concerns regarding the high costs of technology investment remain risks that warrant close attention.