Investing.com-- Japan’s Nikkei 225 index briefly hit the closely-watched 40,000 level on Friday, as a renewed rally in major technology stocks saw the index race back to record highs after a largely muted performance this week.
The Nikkei 225 rose more than 2% to just hit 40,000 points, before retreating to trade slightly below the level.
Gains in the Nikkei were driven chiefly by technology stocks, which tracked overnight gains in their U.S. peers amid persistent optimism over artificial intelligence, which investors believe will greatly benefit chipmakers in the coming months.
The NASDAQ Composite closed at a record high on Thursday, driven by strong gains in AI darling NVIDIA Corporation (NASDAQ:NVDA).
In Japan, semiconductor maker Renesas Electronics Corp (TYO:6723) was among the top boosts to the Nikkei, rallying over 5% after it outlined plans to build a semiconductor assembly facility in India with India’s CG Power and Industrial Solutions Ltd (NS:CGPO) and Thailand’s Stars Microelectronics Thailand PCL (BK:SMT).
Other chipmakers also advanced. Tokyo Electron Ltd. (TYO:8035)- Japan’s most valuable chipmaker, rose 4.3%, while Nvidia supplier Advantest Corp. (TYO:6857) added 3.1%.
Index heavyweight SoftBank Group Corp. (TYO:9984), which is a major tech investor, rose 1.8%. The firm is also exposed to chipmaking through its British chip designing unit Arm Holdings (NASDAQ:ARM).
Broader sentiment was also aided by an in-line reading on PCE price index- the Federal Reserve's preferred inflation gauge, which spurred hopes that the central bank will begin cutting interest rates by June.