Japanese stocks surged 2.12% as YBNR rate hike bets resurge to 1.25%
The Nikkei index rose by over two percent amid renewed expectations that the Bank of Japan will raise interest rates next week.
Japanese equities climbed more than two percent on Monday, driven primarily by strong gains in semiconductor and artificial intelligence companies. Government bond yields also climbed back after their steep decline last week. Markets are now pricing nearly fully a rate hike by the Bank of Japan to 1.25 percent next week. The Nikkei index closed up 2.12 percent at 66,399.84 points, marking its highest close since August 28. The broader Topix index advanced 0.55 percent to 4,125.8 points. Technology stocks led the rally, supported by rising U.S. semiconductor shares. SoftBank Group climbed 11.22 percent, while Kioxia gained 9.31 percent. Advanced and Tokyo Electron, linked to chip manufacturing equipment, each rose more than four percent. Kokusai Electric also increased 7.64 percent. The market movement indicates a shift in investor sentiment toward a looser risk profile despite ongoing uncertainty about future monetary policy.
