Nikkei-Topix Soars, Markets Smell US-Iran Ceasefire
Japanese stocks rose Wednesday morning as hopes for a de-escalation in the Middle East conflict grew, after market expectations pointed to US efforts to push for a one-month ceasefire with Iran. This improved sentiment has driven risk appetite back into Asian equities.
The Topix index rose 2.3% to 3,642.45 as of 9:23 a.m. Tokyo time, while the Nikkei gained 2.7% to 53,648.87. The gains were broad-based, with 1,555 of the 1,657 Topix stocks advancing, only 79 declining, and 23 unchanged.
The largest contributor was Toyota Motor, which rose 3.1%, helping lift the index. Market participants believe that previously heavily sold stocks are starting to gain traction again, especially those sensitive to macroeconomic sentiment.
Daiwa Asset Management strategist Kazunori Tatebe believes there are signs that the US-Iran escalation is easing. He said the Japanese market is likely to cautiously "test a rebound," with previously depressed stocks—including those related to semiconductors—potentially leading the recovery.
Regionally, the MSCI AC Asia Pacific rose 1.3%, indicating a broader risk recovery. Performance-wise, the Topix index has risen 6.8% year-to-date, outpacing the MSCI AC Asia Pacific index's 4.1% rise, indicating Japanese stocks are relatively stronger than the regional average.
Valuation-wise, Topix members' shares are trading at around 16.3 times estimated 12-month forward earnings. Looking ahead, the market will remain highly sensitive to headlines on diplomacy and energy stability; hopes for a ceasefire could support the rally, but geopolitical uncertainty still has the potential to maintain volatility.
Source: Newsmaker.id
