The Tokyo stock market on the 23rd saw the Nikkei Stock Average fall 445 points to 59,140 from the previous trading day, declining for the first time in four days. Shortly after the morning opening, the index was driven up and down by futures trading, and during that volatile period, it briefly touched the 60,000 mark. However, the movement after that was extremely peculiar - while the index came within reach of the 60,000 level multiple times, it was unable to break through as if blocked by an invisible wall. The index soon weakened and slipped into negative territory, then continued to dig lower throughout the rest of the session. Market participants noted that "selling emerged due to a sense of achievement after reaching the 60,000 level," but the index remained above 60,000 for only a few seconds. Rather than any sense of achievement, the index departed from the level in the blink of an eye - it was as if a mechanical and precise selling program was triggered the instant it touched 60,000.

On this day, futures-related selling emerged at the start of the afternoon session and exhausted itself, after which the decline gradually slowed, but there were no signs of short sellers rushing to cover positions, resulting in a subdued recovery. Declining stocks accounted for 75% of the total, which was actually fewer than the previous day when the Nikkei Average rose for three consecutive days. There seemed to be little concern about the Iranian situation, and trading volume on the Prime Market swelled to nearly 9 trillion yen, reaching high levels but lacking vitality. As can be seen from the Nikkei Average's 5-minute chart, it was a day with strong characteristics of an AI-driven automated trading market via futures.

Turning back the clock to the previous day, both the Dow Jones Industrial Average and Nasdaq Composite Index rose in the U.S. stock market, with the Nasdaq up 1.6%, outperforming the Dow and breaking back into clear skies. Particularly noteworthy was the Philadelphia Semiconductor Index (SOX Index), which consists of semiconductor stocks. On that day, it recorded its 16th consecutive gain, rising 2.7%, exceeding the Nasdaq by more than 1 percentage point, and continuing its march toward record highs. The construction rush of AI data centers is creating massive demand for electricity, special demand for AI semiconductors such as GPUs and HBM, and currently, there is also a flood of demand for NAND memory for storage. The stock prices of U.S. NAND memory specialist SanDisk and Kioxia Holdings <285A> have surged precisely because they have been recognized as new symbol stocks related to AI data centers.

The semiconductor stock popularity in the U.S. market is also spreading to the Tokyo market, but the current capital inflow into the semiconductor sector has a different character than before. This is clearly demonstrated in the U.S. stock market by the breakdown in correlation between NVIDIA stock and the SOX Index. Previously, the price linkage between the two was extremely strong, and they had a fractal relationship in terms of charts, but now, with NVIDIA's stock showing pronounced resistance at higher levels, the SOX Index is showing explosive gains, completely diverging from NVIDIA. The SOX Index's movements are more similar to the stock prices of SanDisk and Micron Technology . This means that market interest has shifted from GPUs to memory. NAND memory has rapidly risen to a leading role due to surging demand for enterprise SSDs. Combined with HBM (High Bandwidth Memory), which is installed together with GPUs, these form the dual engines of the semiconductor recovery rally. Of course, this does not mean NVIDIA has declined; rather, the market has found a new driver of stock gains in memory.

In the Tokyo market today, semiconductor-related stocks took a breather from their rise, with nuclear power-related stocks filling the gap, but looking at the overall market, many stocks declined. However, this can be viewed as a healthy-nuanced adjustment, and should be regarded as cooling down for the next move. A new big wave originating from the United States is stimulating the semiconductor sector. GPUs are monopolized by NVIDIA, a market that is in a sense enclosed, but the memory-related stock boom is characterized by being still young as a market rally and having a broad base of related stocks. It can also become a source of vitality to push up the Tokyo market. Today, South Korea's KOSPI index continued its march to record highs, and Taiwan's Weighted Index had been updating record highs daily through the previous day. KOSPI and Taiwan Weighted are packed with semiconductors. Not only the SOX Index, but semiconductor sectors globally are raising the banner of revival.

For memory-related stocks, investors should watch Kioxia Holdings at the forefront, along with IBIDEN CO.,LTD. <4062>, Resonac Holdings Corporation <4004>, and Sumitomo Bakelite Company Limited <4203>. Furthermore, among semiconductor trading companies, TOMEN DEVICES CORPORATION <2737> and MARUBUN CORPORATION <7537> warrant attention. Also, MINATO HOLDINGS INC. <6862>, which this column has followed for a long time, still appears to have sufficient room for upside. Among small-cap stock plays, AKIBA Holdings Co., Ltd. <6840> is also expected to create another opportunity to shine.

On tomorrow's schedule, the March nationwide Consumer Price Index (CPI) will be announced before trading begins and will draw market attention. Note that this time, the fiscal 2025 nationwide CPI will also be disclosed simultaneously. In addition, the March Corporate Services Price Index will also be announced before trading. During morning trading hours, an auction of 3-month Treasury bills will be conducted, and during afternoon trading hours, March nationwide department store sales will be announced. For individual stocks, investors are highly focused on earnings announcements from FANUC CORPORATION <6954>, KEYENCE CORPORATION <6861>, and Renesas Electronics Corporation <6723>. Also, one IPO is scheduled for this day, with Umenoyado Brewery <559A> newly listing on the TSE Standard Market. Overseas, data releases include March UK retail sales, April German Ifo Business Climate Index, and April U.S. consumer sentiment index (University of Michigan survey, final reading). Earnings from Procter & Gamble are also scheduled. (Gin)

Source: MINKABU PRESS

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