Japanese shares rise on AI-shares rally, dividend hunt

Japanese shares experienced a surge on Friday as AI-related stocks gained ground and investors anticipated mid-term dividend eligibility on Monday, according to market data. The Nikkei index increased 1.23% to 66,318.14 by midday, while the Topix broad index climbed 1.19% to 4,123.73. Strategist Daisuke Hashizume from Daiwa Securities noted that investors were purchasing stocks to secure dividend payouts, and the demand for chip-related stocks further bolstered the market.

Bank shares, renowned for their higher dividend yields, led the rally among the 33 industry sub-indexes on the Tokyo Stock Exchange (TSE), surging 3.23%. Mitsubishi UFJ Financial Group (MUFG) exhibited the most significant support for the Topix's gain, rising 3.02%, and Sumitomo Mitsui Financial Group climbed 2.9%. Notably, chip-related stocks Tokyo Electron and Advantest contributed the most to the Nikkei's gain, with Tokyo Electron advancing 4.04% and Advantest 2.45%.

Solid economic indicators further bolstered the strength of technology stocks, as emphasized by Hashizume. Moreover, the US and Japanese central banks signaled their commitment to curbing inflation through rate hikes, which heightened investor confidence in stocks. However, SoftBank Group, a technology investor, experienced a decline of 2.63% following Oracle's shares slipping 3% overnight.

The decline stemmed from a reported "force majeure" notice from Oracle to a Blue Owl unit, the developer of a large New Mexico data center, citing potential delays in securing power for the project. SoftBank shares are co-investors in the "Stargate" infrastructure project alongside Oracle and OpenAI. Out of the over 1,500 stocks trading on the TSE's prime market, 68% experienced gains, 27% fell, and 3% closed flat.