Nikkei 225 extends rally to record highs as Fed bets and tech gains drive momentum

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Nikkei 225 hits record highs

Highlights

- Nikkei 225 rises 1.22% to 44,372 with Topix up 0.6%.

- Tech leaders SoftBank, Advantest, Disco drive gains.

- Fed cut bets and export resilience reinforce momentum.

A sharper-than-expected decline in U.S. producer prices for August reinforced expectations that the Federal Reserve will move to cut rates next week. With inflation data still to come, markets are split on whether the central bank will deliver a 25 or 50 basis point reduction. The prospect of deeper easing drove risk appetite globally, with Japan’s equity market among the biggest beneficiaries as foreign inflows supported the rally.

Nikkei 225 index dynamics (Source: TradingView)

Domestically, sentiment was aided by data showing improving business confidence in the third quarter. Exporters front-loaded shipments ahead of newly imposed 15% tariffs on trade with the U.S., a move that softened the blow of protectionist measures and highlighted Japan’s ability to adapt to shifting trade flows. Producer prices rose 2.7% year-on-year in August, up from July’s revised 2.5%, signaling persistent cost pressures but not enough to derail equity optimism.

Technology shares lead the charge

The day’s gains were driven by the technology sector, echoing Wall Street’s strong performance after Oracle stunned investors with a 1,500% surge in multicloud database revenue. SoftBank Group surged 10%, Advantest gained 4.4%, and Disco rose 6.5%, reflecting continued demand for semiconductors and precision equipment.

Industrial and conglomerate names also participated, with Fujikura climbing 2.6% and Mitsubishi Heavy Industries up 2%. The breadth of participation indicated confidence across growth and cyclical names alike, reinforcing momentum behind the index’s rally.

Technical picture signals strength

From a technical standpoint, the Nikkei 225 remains within a well-defined ascending channel, supported by trendlines intact since April. The current leg higher has pushed the index toward the upper boundary near 44,500, where resistance may trigger profit-taking. Support is layered between 42,600 and 43,200, reinforced by rising 20-, 50-, 100-, and 200-day exponential moving averages.

The Parabolic SAR sits comfortably below current levels, confirming the bullish setup. A breakout beyond 44,500 would set up a move toward 45,000, while a failure to hold above 44,000 could open room for a pullback toward 43,000.

Outlook

The Nikkei’s surge reflects a convergence of supportive global conditions, steady domestic resilience, and sectoral strength. Risks remain tied to upcoming U.S. inflation prints and the durability of export momentum under new tariffs. Yet, the index’s structural uptrend and renewed foreign inflows suggest that investor appetite remains intact. For traders, the 44,500 level will be the key pivot in determining whether the market extends its record run or pauses for consolidation.

As noted in our earlier coverage, the Nikkei has consistently benefited from a mix of global easing bets and Japan’s capacity to leverage export demand. Thursday’s session reinforces that pattern, with foreign inflows and technology leadership once again driving the rally.

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