Nikkei Soars 2.4% on AI Chip Surge Following Micron Report

The Tokyo Stock Exchange kicked off the fourth quarter with a significant jump, as the Nikkei 225 index closed midday at 68,355.81 points, marking an increase of 1,602.09 points, or approximately 2.4%. This surge, reaching its highest level in six weeks, was predominantly driven by artificial intelligence and chip-related stocks. The rally followed a strong quarterly report and optimistic forecast released by Micron Technology.

Key players in the tech sector saw substantial gains. Advantest led the charge, climbing about 7.8% to 36,930 yen and contributing roughly 576 points to the index. Tokyo Electron rose by approximately 4.7%, SoftBank Group by 3.3%, and Lasertec by 8.3%. Other companies like Murata, Taiyo Yuden, and Kyocera also traded higher.

Despite the Nikkei's performance, the broader Topix index saw a more modest gain of about 5 points, closing at 4,114. Over 60% of prime stocks in Tokyo experienced declines, indicating a narrow rally focused on chips rather than a broad market expansion in Japan.

Micron reported fourth-quarter revenues of around $54.2 billion, surpassing the projected $51.1 billion, with adjusted earnings per share at $33.42, exceeding the expected $31.61. The company projected next quarter's revenues at approximately $61.5 billion. DRAM revenues surged to about $39.8 billion, representing 73% of sales, largely due to high-bandwidth memory (HBM) shortages for data centers.

Memory stock support was also seen in South Korea, with the Kospi index rising about 1%. Stock markets in China and Hong Kong remained closed for national holidays. Oil prices traded at moderate levels, easing pressure on energy-importing economies like Japan, though geopolitical risks in the Middle East persist.

In Israel, trading was shortened due to the intermediate days of Sukkot, operating from 10:00 to 14:30, with no trading on Friday. The market is expected to resume on Monday, October 5th. The dollar traded around 3.07 shekels, a slight increase of about 0.2% against the previous day's close. The message for local investors from Asian markets is that while AI memory demand continues to boost chip stocks, broader market caution remains.