Nikkei 225 Rises 0.85% as Tokyo Stocks Recover From AI Jitters and Japan Exports Jump Nearly 17% in September

TOKYO — Japanese stocks rose on Wednesday, recovering some of their recent losses as technology shares advanced following a rally on Wall Street and as data showed a strong increase in Japan's exports.

The benchmark Nikkei 225 index closed up 545.82 points, or 0.85%, at 64,621.24.

The index opened at 64,885.95 and climbed to an intraday high of 65,404.63 in the first half-hour of trading, before giving back some of its gains to touch a low of 64,558.60 in the afternoon.

The gain followed two straight days of losses. On Tuesday, the Nikkei fell 1.30% to 64,075.37 as rising bond yields, inflation worries and doubts about AI financing weighed on the market, with SoftBank Group sliding 6%.

Exports surge

Investor sentiment was supported by trade data showing that Japan's exports jumped 16.7% in September from a year earlier, driven by strong sales of automobiles and computer-related components.

Imports rose even more sharply, climbing 18.9%, largely because of higher oil prices linked to the war involving Iran. That pushed Japan's trade deficit to nearly double from a year earlier.

Japan relies heavily on imported energy, making it particularly sensitive to oil price swings. Higher energy costs have added to inflation pressures and weighed on the trade balance.

Tech stocks recover

Japanese technology stocks advanced after a broad rally in U.S. shares overnight, driven by strong earnings from major American companies.

The gains mirrored a rebound in South Korea, where the KOSPI index surged more than 3% as chipmakers Samsung Electronics and SK Hynix rallied.

Technology and semiconductor-related stocks have been at the center of recent market volatility in Asia, as investors weigh the outlook for artificial intelligence spending and rising financing costs.

A turbulent October

The Nikkei has been volatile this month. On Oct. 15, the index plunged 4.9%, one of the largest one-day point drops in its history, before rebounding the following day.

Investors have been grappling with rising global bond yields, including higher U.S. Treasury yields, which have weighed on growth and technology stocks around the world.

Concerns about the financing of AI investments have also hit Japanese companies with heavy exposure to the sector, including SoftBank Group, a major investor in AI ventures.

Yen and policy outlook

Movements in the yen and expectations for Bank of Japan policy remain important drivers for Japanese stocks. A weaker yen tends to support exporters by boosting the value of overseas earnings, while rising interest rates in Japan could weigh on valuations.

Investors are also watching for signs of how inflation, driven partly by higher energy prices, could influence the central bank's next moves.

Strong year despite volatility

Despite recent swings, the Nikkei has posted significant gains over the past year, rising about 30%, supported by corporate governance reforms, strong earnings and foreign investment in Japanese equities.

What to watch

Investors will be watching upcoming corporate earnings, global bond yields, oil prices and developments in the technology sector for direction.

The performance of U.S. technology stocks and any further signs of stabilization in AI-related shares are also likely to influence Tokyo's market in the coming days.