The Nikkei index surged by approximately 2,800 points [1], briefly recovering to the 67,000-point level [1] on Friday.

This rally signals a shift in investor sentiment as geopolitical tensions in the Middle East ease. The surge specifically benefited the semiconductor and artificial intelligence sectors, reflecting a broader market bet on global stability.

Market optimism was fueled by expectations that fighting between the U.S. and Iran would end [2]. This anticipated resolution helped lower the risk premium for high-growth tech stocks, which are often sensitive to international conflict.

Kioxia Holding Co., a major semiconductor memory firm, saw its market capitalization briefly exceed 44 trillion yen [2]. During this spike, Kioxia overtook Toyota to become the most valuable listed company in Japan [2]. The company's rapid ascent underscores the current dominance of AI-related hardware in the global economy.

Earlier in the day, the Nikkei's morning increase stood at 2,225 points [1]. The volatility highlights how closely the Tokyo Stock Exchange remains tied to U.S. foreign policy and Middle East stability.

"If the situation in the Middle East truly settles down, the momentum of AI and semiconductor-related stocks may strengthen further," a market participant said [2].

“Kioxia Holding’s market capitalization briefly topped 44 trillion yen”

The brief displacement of Toyota by Kioxia represents a symbolic shift in the Japanese economy, moving from a traditional reliance on automotive manufacturing toward a future driven by semiconductor infrastructure. Because AI hardware is critical for global computing, Japanese tech stocks now react more sharply to geopolitical developments in the Middle East and U.S. diplomatic shifts than to domestic industrial metrics.