The Nikkei 225 closed above 72,000 for the first time on Monday, rising 1.5% to 72,353.96 and extending a record-breaking run to a sixth consecutive session. The broader TOPIX also set a fresh closing high at 4,095.05. Intraday, the Nikkei touched 72,831.73 before profit-taking trimmed gains, reflecting both sustained buying pressure and caution near all-time peaks.

The advance was driven by semiconductor and artificial-intelligence-related stocks, with Tokyo Electron up 2.3% and SoftBank Group gaining 2.4%. The government of Prime Minister Sanae Takaichi outlined a target of ¥370 trillion ($2.29 trillion) in public and private investment in strategic sectors including AI and chips by 2040, a plan reported by the Nikkei business daily. In Seoul, the Kospi added 0.4% to trade near record levels, led by a 4.7% surge in memory-chip maker SK Hynix. Strategists at Nomura Securities in Tokyo noted that AI-linked companies are again playing a leading role, while caution persists over Middle East developments.

Asian equities were mixed outside Japan. Hong Kong’s Hang Seng lost 1%, Shanghai edged up 0.2%, and Taiwan’s Taiex jumped 2.8%. Oil prices retreated after mediators Qatar and Pakistan said progress had been made in US-Iran peace talks, with a roadmap to reach a final deal within 60 days. Brent crude slipped to around $79–80 a barrel, well below its May peak above $126, though Tehran’s announcement of another closure of the Strait of Hormuz kept supply risks in view. In currency markets, the dollar firmed to ¥161.68 and the euro weakened to $1.1454; sterling fell 0.2% amid reports that UK Prime Minister Keir Starmer is considering his political future after a rival’s by-election victory.

The Federal Reserve’s hawkish turn last week has markets pricing a 75% chance of a rate hike as early as September, pushing two-year Treasury yields to their highest since early 2025. The core PCE inflation gauge, the Fed’s preferred measure, is due Thursday and is forecast to tick up to 3.4% in May. Lower-level US-Iran technical talks are scheduled for the rest of the week, with the Strait of Hormuz situation and the 60-day roadmap as immediate focal points.