Nikkei 225 Index nears crucial price as Kioxia, Tokyo Electron, Softbank stocks surge

The Nikkei 225 Index jumped and neared its all-time high as memory and semiconductor companies like Kioxia, Tokyo Electron, Advantest, and Keyence Corporation soared. It jumped by over 5% to 71,950, a few points below the all-time high of 72,781.

Kioxia, Tokyo Electron, Advantest, and Keyence boosts Japan stocks

The Nikkei 225 Index has soared in the past few months. It has jumped by 87% in the last 12 months and by 40% this year, helped by the ongoing artificial intelligence (AI) boom.

This rally continued today, driven by memory and semiconductor giants. Kioxia stock jumped by 8%, with its market capitalization soaring to over $312 billion. It has become the biggest Japanese company and is followed by Softbank, which stands at $230 billion. 

Tokyo Electron, a company that builds machines used in semiconductor manufacturing, rose by 8.2%, with its market capitalization rising to over $205 billion. This jump is notable as it counts SK Hynix as one of its top clients.

Advantest, a leader in semiconductor testing, rose by 12.7%, with its valuation rising to $135 billion. Softbank, which has made some of the largest AI companies, soared by 2%, with its valuation rising to $230 billion.

These stocks are rising after SK Hynix announced a major expansion plan that will see it list in the United States. It will use the $30 billion capital raise to expand its South Korean operations, a sign that the management expects the growth to continue. 

They are also soaring after Micron published its quarterly report. Its revenue jumped to $41.46 billion, higher than the $23.8 billion from the second quarter and $9.3 billion in the same period last year. 

Its net income rose to $28.24 billion, with the management predicting the business will continue thriving this year. 

Crude oil prices have plunged

The Nikkei 225 Index also continued rising as crude oil prices plunged. Brent, the global benchmark, dropped to $72.90, its lowest level since February 27, and much lower than the year-to-date high of $119.52. The West Texas Intermediate (WTI) also retreated to $69 as the number of ships crossing the Strait of Hormuz jumped. 

The ongoing decline in oil prices may continue in the foreseeable future as the global market becomes increasingly oversupplied. At the same time, demand destruction is weighing on consumption. Lower oil prices are particularly important for Japan, which imports most of its crude oil from the Middle East.

The index is also soaring as the Japanese yen continued its strong downward trend. Data shows that the USD/JPY pair has risen to 161.72, up by 12% in the last 12 months. A falling yen is a bullish thing for some Japanese companies that export most of their products.

Nikkei 225 Index technical analysis

Nikkei Index chart | Source: TradingView

The daily chart shows that the Nikkei Index has been in a strong rally in the past few months. It retreated and formed a morning star candlestick pattern on Wednesday this week. This is one of the most common bullish reversal sign in technical analysis.

The index has jumped above all moving averages, a sign that it bulls are in control. Also, the Relative Strength Index and the MACD have continued rising.

Therefore, the index will likely continue rising in the near term as investors target the next key resistance level at 45,000. This view will be confirmed when it moves above the key resistance at 72,781.