Japan's Nikkei Climbs 2.4 Percent to 69,947 as Softer US Jobs Data Eases Rate Fears and Lifts AI Shares

TOKYO — Japan's Nikkei 225 rose 2.4 percent on Monday, retaking the 70,000 line during the session for the first time since early July, as a weaker U.S. jobs report cooled bets on a Federal Reserve rate increase and buyers returned to semiconductor and artificial-intelligence shares.

The index was at 69,946.86 in late afternoon trading, up 1,637.40 points, or 2.40 percent. It opened up 1.18 percent, or 804.28 yen, at 69,113.74, then extended the gain. By midmorning it was up about 2.5 percent and above 70,000. At 10:37 a.m. it stood at 70,024.27, up 1,714.81 points. The morning session ended at 70,037.61, up 1,728.15 yen, or 2.53 percent. The intraday high was about 70,072. The broader Topix rose about 1.1 percent, to 4,136.61, at midmorning. The afternoon trade near 69,947 left the index just under the round number it had cleared earlier.

The trigger was Friday's U.S. employment report. A softer September payrolls figure pushed back expectations of a Fed hike this month. Wall Street rose into the weekend. Tokyo took that lead. Electrical machinery, machinery, and glass and ceramics stocks were firm. Mining and pulp and paper were weaker.

The index points came from the usual heavy names. Tokyo Electron, Advantest and SoftBank Group led the advance. Advantest and Tokyo Electron together added more than 700 yen to the Nikkei in the morning, according to the Nikkei newspaper. SoftBank, which holds a large stake in OpenAI, rose nearly 4 percent and traded as high as 6,558 yen. Tokyo Electron gained about 5.6 percent. Advantest rose about 4.8 percent. Murata Manufacturing added about 3.4 percent. Fast Retailing was also higher. Overseas buying of Nikkei futures was cited as a support.

"With expectations for a U.S. rate hike this month receding, money is coming back in particular to data-center shares that had been hurt by rising interest rates," Kentaro Shida, head of research at Yamawa Securities, said. "Earnings season starts in Japan in the second half of the month, so buying on earnings hopes is also easier to come by."

Yusuke Maeyama, a senior researcher at NLI Research Institute, said the pullback in U.S. rate-hike bets had "for now eased concerns about a global rise in interest rates that had been capping equities."

The 70,000 mark is a three-month retrieval, not a record. The index last held it in early July and had fallen nearly 12 percent from that area to its September low before this rebound. Monday's session put it back at the highest level since July 6. A close under 70,000 after a trade above it is a failed hold for the day, not a failed rally. The gain was still the largest in recent sessions and broad enough that the Topix rose with it.

The rate story is the one that can reverse. A single soft payrolls print delayed a hike. It did not end the cycle. Data-center and chip-equipment shares in Tokyo trade as a lever on U.S. yields and on Nvidia's supply chain. If the next inflation print restores the hike, the same names that added 700 yen on Monday are the ones that give it back. Shida's second point, domestic earnings from the second half of October, is the local test. SoftBank's OpenAI exposure, Tokyo Electron's tool orders and Advantest's tester demand will have to show up in guidance, not only in a Wall Street lead.

For Monday the mechanism was simple. Weaker U.S. jobs, a higher Wall Street close, and buying in the AI names that dominate the Nikkei. The index crossed 70,000 for the first time since July and was still up 2.4 percent late in the day.