Japanese stocks posted strong gains in 2025, with the benchmark Nikkei 225 Index rising 26%, driven largely by advances in technology shares amid a global surge in artificial intelligence investment.
Stock market performance
Japan’s main equity benchmark, the Nikkei Stock Average, closed at 50,339.48 on Tuesday, holding above the 50,000 level that it reached earlier this year.
The rally was also supported by expectations of economic stimulus measures under Prime Minister Sanae Takaichi, who took office in October. However, the Nikkei edged down 0.37% in Tuesday’s session, weighed by concerns over the financial position of SoftBank Group, which accounts for about 7% of the index by weight. Shares of the conglomerate came under pressure following reports of its plans to acquire Digital Bridge Group for $4 billion.
Earlier this year, the Nikkei hit a record high of 52,411.34. The market also faced bouts of volatility, including a sharp sell-off in April that wiped more than 2,600 points off the index amid global market turmoil triggered by US tariff measures under President Donald Trump.
AI demand
The Nikkei’s strong performance this year was underpinned by gains in Japanese technology stocks as investment in artificial intelligence accelerated. Technology companies make up approximately 52.7% of the Nikkei 225 as of late December.
“It’s no exaggeration to say that the Nikkei’s rise was led by chip-related shares throughout the year,” said Wataru Akiyama, a strategist at Nomura Securities.
Meanwhile, South Korea’s stock market also posted outsized gains. The Korea Composite Stock Price Index rose 75.6% year-to-date, supported by strong performances from major chipmakers Samsung Electronics and SK Hynix.
