Tokyo, Feb 25, 2026, 10:42 JST — Regular session
Japan’s Nikkei 225 surged to another all-time high in early Wednesday trading, jumping 1.1% to 57,956.92 after briefly hitting 58,047.89. Gains came as worries over artificial intelligence cooled and the yen remained on the softer side. The broader Topix barely budged, inching up just 0.07% to 3,818.73. (The Business Times)
This shift is notable: Tokyo’s often been a stand-in for global AI sentiment—dumping stocks seen as vulnerable to upheaval, but piling into data-center “picks and shovels” just as quickly. After a bounce in global equities overnight, it’s clear how sharply the mood can snap back when investors decide the most recent bout of AI-driven jitters overshot. (Reuters)
Currency action added fuel to the rally. The yen dropped to 155.74 per dollar, following a report that Prime Minister Sanae Takaichi voiced skepticism over more rate hikes during talks with Bank of Japan Governor Kazuo Ueda. That’s sparked chatter about political interference muddying the BOJ’s path to tightening. Still, most economists in the Reuters market recap are betting on a hike—April or June look most likely. (Reuters)
Fresh inflation numbers barely moved the needle on the rates discussion. Japan’s services producer price index, which tracks what companies charge each other for services, climbed 2.6% in January year-on-year, matching December’s pace, according to a Reuters report. The Bank of Japan has already pushed short-term rates up to 0.75% after winding down its lengthy stimulus in 2024. Governor Ueda continues to highlight the relationship between higher wages and firms’ pricing strategies. (Reuters)
Traders have been eyeing the unusually concentrated market leadership. Just a day ago, AI-related stocks took the spotlight again as Tokyo came back online post-holiday—shares of Furukawa Electric, a fibre-optic cable producer, soared 16% amid talk of ramped-up AI infrastructure investment. Naoki Fujiwara at Shinkin Asset Management linked the buzz to ongoing speculation about Nvidia and OpenAI, which colored the session. That same Reuters piece flagged losses for some defence stocks after China moved to add Japanese firms to an export-control list, a move it described as a response to Japan’s “remilitarisation.” (Business Recorder)
Strategists aren’t backing away from their bullish calls on the Nikkei’s record-breaking run, though they don’t expect it to be smooth sailing from here. According to a Reuters poll of equity strategists, the index is projected to top 60,000 by mid-2027, building on gains of over 13% so far this year. T&D Asset Management’s Hiroshi Namioka flagged that “time-based consolidation” could be necessary to ease valuation worries. Kiyohide Nagata from Tokai Tokyo Intelligence Laboratory pointed to persistent strength in data-centre supply chain demand, assuming U.S. hyperscalers stay in buying mode. Meanwhile, the same Reuters poll, citing government data, noted foreign investors snapped up a net 1.42 trillion yen in Japanese stocks for the week ended Feb. 14. (Reuters)
Day-to-day risks remain on the table. Should upcoming U.S. tech earnings spark fresh worries over AI investment returns, those Tokyo stocks that have driven recent gains could just as easily pull the index lower. And if BOJ expectations shift more abruptly than markets anticipate, the rally faces another challenge—tighter financial conditions and a volatile yen.
Bets on March are building among BOJ watchers. Makoto Sakurai, a former board member, thinks a rate hike could land as soon as March if the yen keeps weakening, with the central bank’s next meeting on March 18-19. But, Sakurai cautioned, moving too quickly might squeeze small businesses and regional lenders. (Reuters)
Nvidia’s earnings are front and center for global markets right now. According to Reuters, investors are looking for proof that Nvidia can keep up its profit momentum as Big Tech lines up $630 billion in capital spending. There’s also pressure coming from major cloud firms developing their own chips, intensifying scrutiny. “People are so concerned about AI spending — whether we’re in a bubble,” Ivana Delevska, chief investment officer at Spear Invest, told Reuters. (Reuters)
Tokyo’s afternoon session comes with the usual lineup: eyes on the yen, cues from U.S. tech, plus a watch to see if that record high on Wednesday lures in new money or sparks a round of profit-taking. Looking slightly further out, traders have Nvidia’s results dropping Wednesday and the BOJ’s March 18-19 meeting circled for a fresh signal.
