Tokyo stocks extended their winning streak on Thursday, with the Nikkei 225 closing up 784.53 points, or 1.16 percent, at 68,308.59 — its third consecutive session of sharp gains, fueled by semiconductor stocks and shifting central bank expectations.
The Topix index also hit a second straight record high, closing at 4,176.04. Gains accelerated after Bloomberg reported the Bank of Japan is considering a rate increase at its September or October policy meeting, boosting bank shares including Mitsubishi UFJ and Sumitomo Mitsui Financial Group. By Friday morning, the Nikkei had recovered to around 69,100, up roughly 800 points, with Advantest, SoftBank Group, and Kioxia leading gainers.
Market sentiment was further shaped by diverging outlooks for major central banks. The probability of a Federal Reserve rate hike in September fell to 34.6 percent from 55 percent a week earlier, after U.S. producer prices came in unexpectedly flat in July. Meanwhile, expectations are growing that the BOJ will raise rates in September.