The Tokyo stock market on the 21st saw the Nikkei Stock Average rise 524 points to 59,349, continuing its upward trend. The index briefly hit uncharted territory, surpassing the all-time high of 59,518 set on the 16th, though it lacked follow-through. This serves as a warning that market conditions are not yet favorable for a clean break above the 60,000 level.

Frustration mounts over shifting US policy statements regarding Iran, which have complicated diplomatic de-escalation. Markets, however, appear to have priced in "zero expectations." Even as the Strait of Hormuz remains clouded in uncertainty, the Nikkei continues to climb unperturbed. Chasing this momentum blindly carries significant risk in a "forest of skepticism" that lacks clear conviction.

Individual stocks require a different analytical dimension than the broader indices. Today presented a rare divergence where the Nikkei surged over 771 points by the midday close, yet declining issues outnumbered gainers. By the final bell, the TOPIX fell into negative territory. While fiscal year ending March 2026 results may satisfy, guidance for the year ending March 2027 will likely be conservative, making it difficult for companies to issue bullish forecasts. Against this backdrop, only AI and semiconductors are viewed as beneficiaries of war-related demand, reflected in the Philadelphia Semiconductor Index (SOX Index) surge.

The fundamental strategy for individual stocks is to avoid chasing high prices. While patient retail investors might eventually break even in a bull market, the cost of frozen capital is significant. Long-term holders with low entry costs can stay the course, but new entries?no matter how strong the underlying story?require nimble, tactical trading to ride the trend.

Investment capital is currently rotating into AI semiconductor infrastructure, specifically data centers. "Light" (photonics) has emerged as a tactical theme. OXIDE <6521> hit its daily limit-up, while QD LASER <6613> surged nearly 300 yen to 1,877 yen. THINE ELECTRONICS <6769> and JTEC CORPORATION <3446> show signs of breakouts. AGC <5201> also holds appeal for a price correction.

Hot money is shifting to crystal device manufacturers, essential for high-precision synchronization in AI data centers. RIVER ELETEC CORPORATION <6666> broke the 1,000 yen level, while NIHON DEMPA KOGYO <6779> recovered to the 2,000 yen level for the first time in 16 years. DAISHINKU CORP. <6962> remains a laggard with potential, supported by its "Arkh Series" technology, low PBR, and high dividend yield.

Tomorrow's schedule includes trade statistics and Bank of Japan data on export and import trends. SQUEEZE <558A> will list on the TSE Growth Market, and market attention will focus on DISCO CORPORATION <6146> earnings. Internationally, central bank meetings in Indonesia and Turkey, UK CPI, and US earnings from TESLA , BOEING , and IBM will be closely watched.

Source: MINKABU PRESS

*Translated by generative AI. Click here for the original article.