Nikkei Average Breaks 72,000 Yen for First Time, Boosted by Government AI and Semiconductor Investment Plan

Nikkei Average Breaks 72,000 Yen for First Time, 6th Consecutive Record High On Monday the 22nd, the Nikkei Stock Average on the Tokyo stock market surged significantly, closing at 72,353 yen, up 1,103 yen from the previous weekend, breaking the 72,000 yen mark for the first time. During trading hours, it rose to 72,831 yen, updating its record high for the sixth consecutive business day. Buying in AI and semiconductor-related stocks drove the market. 123456

Government to Invest 370 Trillion Yen in Public-Private Sectors Across 17 Fields Including AI and Semiconductors The government's public-private investment target for 17 fields included in the growth strategy has been revealed. With plans to invest 68 trillion yen in semiconductors, 10.5 trillion yen in physical AI, and 10.3 trillion yen in quantum computing, totaling approximately 370 trillion yen by fiscal 2040, expectations of demand expansion in the market have risen, supporting the stock price increase. 678

Yen Falls to Upper 161 Yen Range Against Dollar, Approaching 39-Year Low In the Tokyo foreign exchange market on the 22nd, the yen traded in the upper 161 yen range against the dollar, and temporarily fell to 161.92 yen in the New York market, approaching yen depreciation levels not seen since 1986. Uncertainty over the outlook for US-Iran talks led to "safe-haven dollar buying," and Finance Minister Katayama reiterated a warning, stating, "We will respond appropriately as necessary." 9101112

Finance Minister Katayama and US Treasury Secretary Bessent Hold Online Talks Amid historic yen depreciation levels, Finance Minister Katayama held online talks with US Treasury Secretary Bessent on the 22nd. The discussions are believed to have covered responses including the possibility of currency intervention. Although the government and the Bank of Japan conducted interventions totaling approximately 11.7 trillion yen in April and May, the yen's weakening trend continues. 10

Prime Minister Takaichi States Food Consumption Tax Cut Will Return to Original 8% After Two Years At the House of Representatives Budget Committee on the 22nd, Prime Minister Takaichi stated that the ruling party's pledge to reduce the consumption tax on food to zero for two years would revert to the current reduced tax rate of 8% after the period ends. Positioning it as a "bridge" until the introduction of a refundable tax credit, she also expressed expectations for the Bank of Japan to conduct appropriate monetary policy operations in coordination with the government. 1314