Nikkei Surges on NVIDIA Earnings and Tech-Driven Market Optimism

Key Takeaways

• Nikkei gains 1,161 points, up 1.87%, as NVIDIA earnings support tech and AI-linked stocks.
• Japan’s Nikkei edges toward a fresh record high, with Taiwan stocks up 2.3% and MSCI Asia ex-Japan +0.8%.
• Brent crude rose 1.9% to $104.56, WTI climbed 1.35% to $97.64, while weekly oil trends remain lower.
• NVIDIA results restored confidence in AI infrastructure, boosting Japanese tech and semiconductor equipment stocks.
• US-Iran peace talks and Middle East energy supply remain key geopolitical factors for equity and commodity markets.

The Nikkei 225 surged 1.87% to 63,233.70, recovering nearly all of last week’s tech-led pullback. The index’s session high reached 63,446.70, supported by NVIDIA’s earnings, which strengthened sentiment across AI-linked markets. Taiwan stocks climbed 2.3%, while MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8%, reflecting optimism across regional equities. US futures gained 0.36% and European futures rose 1%, signalling a constructive global opening.

Investors who had reduced exposure to Japanese tech and growth stocks prior to NVIDIA’s earnings were encouraged to return to the market, particularly targeting semiconductor equipment, electronics, and AI infrastructure names that form a large part of the Nikkei.

NVIDIA Earnings Lift AI-Linked Sentiment

NVIDIA’s quarterly results highlighted robust AI demand, which directly impacted Japanese equities due to strong exposure in chip, automation, and data-centre supply chains. The broader AI infrastructure cycle in Japan benefited from NVIDIA’s performance, reinforcing investor confidence in technology-led growth. Sustained gains will depend on continued AI spending offsetting higher global rates and elevated energy prices.

Geopolitical Risk and Oil Volatility

US-Iran peace talks remain a critical macro factor. Progress is cautious, with disagreements over Tehran’s uranium stockpile and the Strait of Hormuz. Brent crude increased 1.9% to $104.56, while WTI gained 1.35% to $97.64, maintaining weekly declines of around 6% for Brent. Elevated oil prices keep inflation expectations alive and influence central bank policy, affecting equity risk appetite in energy-importing markets like Japan.

Japan Inflation and BOJ Policy

Core CPI in Japan slowed to a four-year low of 1.4% in April, below the 1.7% forecast, easing pressure on the Bank of Japan (BOJ). Underlying inflation, however, remains elevated, with energy costs expected to rise from Middle East tensions. BOJ Governor Kazuo Ueda is set to speak on June 3 ahead of the June 15–16 policy meeting, where oil prices, the yen, and wage data will influence decisions on potential rate adjustments.

 Technical Analysis

The Nikkei 225 has re-established bullish momentum, trading around 63,234 and approaching the recent peak of 63,817. Moving averages (MA5: 61,709; MA10: 62,214; MA20: 61,347) slope upward, reflecting strong momentum continuation.

Discover more insights on Nikkei, AI-driven markets, and regional risk factors in this article.