Asian equities climbed on Monday, led by Japan where both the Nikkei 225 and TOPIX reached fresh record highs amid a wave of buying in semiconductor and artificial intelligence-linked shares.
Japan's benchmark Nikkei 225 rose as much as 3.3% to an intraday record of 65,408.87 points. The broader TOPIX index also hit an all-time peak, advancing as much as 1.6% to 3,953.89 points. Market participants attributed the strength largely to chip-related names and stocks tied to AI, echoing late-week gains in U.S. semiconductor companies that continued to sway investor positioning.
Among individual movers in Tokyo, Renesas Electronics Corp (TYO:6723) and Rohm Ltd (TYO:6963) each surged 10%, contributing materially to the benchmark's advance.
Across the region, broader Asian markets posted gains. China's Shanghai Composite rose 0.6% while the Shanghai Shenzhen CSI 300 climbed 1%. In Australia, the S&P/ASX 200 increased 0.5%, and Singapore's Straits Times Index added 0.4%. India's Nifty 50 jumped roughly 1% in early trade. Markets in Hong Kong and South Korea were closed for holidays.
Wall Street futures strengthened during Asian hours. Nasdaq futures were up by more than 1% as investors continued rotating into AI and semiconductor stocks after upbeat earnings and guidance from U.S. chipmakers. U.S. equity markets themselves remained shut on Monday for a public holiday.
Investor sentiment received a further lift from comments related to U.S.-Iran talks. U.S. President Donald Trump said a memorandum of understanding to reopen the Strait of Hormuz had been "largely negotiated," a remark that raised hopes the months-long tensions in the Middle East could ease and that energy flows might normalize.
However, the tone remained cautious: Trump later warned there was "no rush" to finalize any agreement, a caveat that kept traders alert to the chance of abrupt reversals depending on developments.
Oil prices reacted sharply to the prospect of an agreement. Brent crude tumbled by more than 4%, slipping below $100 a barrel as the market priced in the possibility of smoother shipping through the strategically important waterway. The decline in crude helped reduce some inflationary pressure that had weighed on global equities in recent months.
Analysts and market participants noted that while headlines around talks with Iran and moves in energy prices have supported risk assets, markets remain sensitive to further developments. Elevated energy costs and persistent inflation concerns continue to complicate the outlook for global growth and the trajectory of interest rates.
For now, the combination of semiconductor-driven momentum, a dip in oil, and tentative diplomatic progress has been enough to boost Asian equities, particularly in Japan where record highs reflected concentrated gains in technology-linked names. Traders, however, remain attuned to both the headlines around the Iran negotiations and incoming signals on inflation and monetary policy that could reverse sentiment.