Nikkei Rises as South Korea Tech Shares Rebound

The Nikkei closed at 65,856.43, up from 65,528.09 a day earlier, while trading remained firmly above both the 50-day and 200-day moving averages. The index has been consolidating after a sharp run earlier this summer, and the latest gain suggests buyers are still willing to step in even as momentum indicators have cooled from overbought levels. The relative strength index near 58.0 points to a market that has recovered from oversold conditions without yet flashing the kind of exhaustion seen at recent peaks.

South Korea’s market has been a key read-through for the region because of its weight in memory chips and broader tech manufacturing. A rebound there tends to spill over into Japan, where investors track the same cycle through suppliers to semiconductors, automation and precision equipment. That linkage has grown more important as global AI spending, data-centre demand and inventory restocking reshape earnings expectations across the sector.

The timing also matters for global risk assets. Adalytica’s trade signals show US equities still in a fear regime, while FX safe-haven sentiment remains muted, suggesting investors are not rushing into defensive positioning even after recent volatility. That leaves room for selective buying in Asia when tech leadership re-emerges, especially in markets seen as direct beneficiaries of the electronics rebound.

For Japanese investors, the main question is whether this is a short-covering bounce or the start of a broader reacceleration in earnings expectations for exporters tied to chips and industrial technology. The bull case is that South Korea’s rebound reflects firmer end-demand and better inventory discipline across the supply chain. The bear case is that the move is still mainly technical, with valuations and positioning vulnerable if global growth slows again or if the semiconductor cycle fails to broaden beyond a handful of large names.

The next test will be whether the regional tech recovery can hold through US trading and into upcoming earnings updates. If it does, the Nikkei’s latest advance may prove less like a standalone bounce and more like evidence that Asia’s technology cycle is regaining traction.