Japan’s Nikkei share average rose on Monday (May 29) to its highest level since July 1990, buoyed by optimism over a US debt ceiling deal and a weaker yen.

SoftBank Group jumped more than 8 per cent as shares of Japanese chip-related companies continued to outperform amid the AI euphoria that also propelled Wall Street peers.

The Nikkei surged as high as 31,560.43 within the first 10 minutes of trading, although gains were capped over the course of the day as the index closed up 1.03 per cent at 31,233.54.

SoftBank Group continued to push higher throughout the day, driven by news that British subsidiary Arm Ltd had rolled out a new chip technology that Taiwan smartphone-chip maker MediaTek will adopt in next-generation products.

Advantest, the chip-testing equipment maker that counts Nvidia Corp among its clients, climbed more than 4 per cent, taking gains over the past three sessions to nearly 26 per cent.

“The trigger for everything was Nvidia,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

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The Nikkei is easily swayed by moves in the big tech stocks, relative to the Topix, and that sets the index up to outperform, he added.

The broader Topix rose as much as 1.36 per cent to 2,175.13 in early trading but failed to get close to last week’s 33-year high at 2,188.66. It finished the day up 0.69 per cent at 2,160.65.

Lifting the mood across the Japanese market early on, US President Joe Biden said on Sunday he had finalised a budget agreement with House Speaker Kevin McCarthy and the deal was ready to move to Congress for a vote.

Meanwhile, the yen dropped to the cusp of 141 per dollar for the first time in six months, buoying the value of overseas revenue for Japanese exporters.

Honda Motor rallied 1.28 per cent and Subaru advanced 1.67 per cent.

Of the Nikkei’s 225 components, 165 rose, while 51 fell and nine were flat. REUTERS