FX.co ★ Nikkei Rebounds on Wall Street Boost

The Nikkei 225 Index jumped 4.3% to climb back above 56,500, while the broader Topix rose 3.5% to 3,760 on Thursday, retracing losses from earlier in the week and mirroring a tech-driven rebound on Wall Street. The recovery came as oil prices steadied and inflation concerns eased, even as tensions between the US and Iran showed no sign of abating.

For the rally in equities to be sustained, investors will need clearer visibility on how long the conflict will last and how deeply it may affect global growth and inflation. Bank of Japan Governor Kazuo Ueda cautioned that an escalation in Middle East tensions could materially affect Japan’s economy, suggesting the central bank may leave policy rates unchanged for an extended period.

Technology shares led the gains, with strong advances in Fujikura (up 7.3%), Advantest (6%), and Tokyo Electron (4.9%). Financial stocks also outperformed, as Mitsubishi UFJ Financial, Mizuho Financial, and Sumitomo Mitsui logged increases ranging from 5% to 9%.