Asian stocks rise, Nikkei 225 index hits record high

The Nikkei rallied over 3% to a record high of 53,997.5 points, while the broader TOPIX index climbed 2.3% to a record high

Most Asian stocks rose on Tuesday as technology stocks pushed higher on sustained optimism over artificial intelligence, with Nikkei 225 index hitting a record high in catch-up trade.

The Nikkei was also aided by reports that Japanese Prime Minister Sanae Takaichi may call for an early election to further boost her government’s parliamentary majority– a scenario that will let her dole out even more stimulus spending.

Nikkei 225 was a standout performer on Tuesday as trade resumed from a long weekend.

The Nikkei rallied over 3% to a record high of 53,997.5 points, while the broader TOPIX index climbed 2.3% to a record high.

The stock rally was in part fuelled by catch-up trade, and also came following media reports that Takaichi was planning a snap election by as soon as February.

Such a scenario will see the Japanese prime minister capitalize on her strong popularity, and will likely be aimed at boosting her ruling coalition’s parliamentary standing.

This in turn can give Takaichi much more headroom to approve policy, with the new prime minister widely expected to dole out more fiscal stimulus.

Bets on more fiscal spending helped investors look past concerns over a continued diplomatic spat between China and Japan, over late-2025 comments made by Takaichi on military intervention in Taiwan.

Broader Asian shares advanced with technology squarely in the lead, as investors grew more optimistic about the sector’s prospects with artificial intelligence.

Hang Seng outperformed on this trend, rising 1.8% to a two-month high. Traders piled into Hong Kong and Chinese tech stocks in recent weeks, as a flurry of upbeat listings by major Chinese AI firms drummed up sentiment over the country’s prospects in the sector.

Mainland Chinese indexes– the Shanghai Shenzhen CSI 300 and the Shanghai Composite– gained 0.7% and 0.3%, respectively.