Nikkei 225 Posts 36% Quarterly Gain, Largest Since 1965, Led by Tech Stocks
Claire Weston
The Nikkei 225 closed the quarter with a 36% gain, its largest since records began in 1965, driven by a tech-stock surge — a rally unmatched in nearly sixty years of Japanese market history.
A 36% quarter — how rare is that?
The Nikkei 225 rose 1.36% Tuesday morning to 70,416.02, while the Topix added 0.73% to 4,010.88.
This means → a 36% quarterly gain, the biggest since 1965. No single quarter in nearly sixty years has come close.
In plain terms = if you bought a Nikkei-tracking fund at the start of the quarter, that one quarter beat many markets' full-year returns.
Who led the charge — and why tech?
Top gainers: Rakuten +5.39%, Tokyo Electron +5.09%, Fujikura +5.06% — all tech or tech-adjacent names.
Of the index's 225 constituents, 149 rose, 72 fell, 3 were flat — most stocks gained, but tech gained hardest.
This reflects capital concentrating in the tech sector rather than spreading evenly across the board.
How did a U.S.–Iran deal move Japanese stocks?
The U.S. and Iran reached an agreement to halt hostilities and guarantee commercial passage through the Strait of Hormuz, lifting global risk sentiment.
The Strait of Hormuz — the narrow sea lane carrying roughly a fifth of the world's oil — saw its passage risk drop, directly reducing energy-price uncertainty.
This means → U.S. stocks surged overnight, with the Dow hitting a record close, and that optimism carried into Japan's open.
Industrial output missed expectations — why no panic?
Japan's May industrial output rose 0.5% month-on-month, below market forecasts — not a strong reading on its own.
But manufacturers themselves forecast a 3.7% rebound in June, effectively saying "this month was slow; next month will catch up."
In plain terms = the market is pricing in the forward outlook, not a single month's soft print.
The yen at a 40-year low — blessing or curse?
The yen fell overnight to its lowest level against the dollar in 40 years, intensifying currency pressure.
Sony Financial Group analysts noted the U.S.–Iran talks "should support share prices," but warned that quarter-end portfolio rebalancing by institutions could trigger sharp swings.
This reflects an unresolved tension: a weaker yen boosts exporters' profits short-term, but sustained depreciation raises import costs that can eat into those same profits — the yen's next move is the key variable to watch.
Content is for reference only, not financial advice.