Nikkei 225 Forecast: AI and Semiconductor Rally Puts 70,000 in Focus

Nikkei 225 gained 3.27% last week on solid demand for technology and AI stocks. This move was clear indication of buying activity among Japanese stocks. The rally was led by technology stocks. Samsung Electronics rose by over 5% after the company began to ship samples of its newest high bandwidth memory chips to customers worldwide.

This news supported the larger theme of Asian AI and semiconductor stocks. Additionally, it supported Japanese chip-related firms due to the fact that Japan is an important market for semiconductor materials, components and equipment. This is important for the Nikkei 225, which is defined by heavyweight technology and chip supplier stocks. The global demand for artificial intelligence could push the index up significantly.

The chart below shows that Tokyo Electron Ltd., Advantest Corp. and Lasertec Corp. remain in strong bullish trend since 2025 bottom. The price structures in these semiconductor stocks suggest further upside in the next few months on the AI boom.

SoftBank also continues to surge after forming a new bottom at 5,000.

Japan is heavily dependent on energy imports which makes the Iran situation a risk for the Nikkei 225. Oil and gas prices can climb if there are reports of missiles, drones or activities in the area near the Strait of Hormuz. This would negatively impact trade balance and squeeze corporate profits.

Investors also heard that the U.S. and Iran had reached virtual agreement on the terms of a temporary ceasefire. This helped to reduce fear and shift the market to growth areas. The Nikkei 225 is likely to remain supported near record highs as long as the momentum of the AI rally continues and the energy prices remain in check.

Nikkei 225 Technical Outlook: 70,000 Remains in Focus

The long-term outlook for the Nikkei 225 remains strongly bullish as seen by the quarterly chart below. It is observed that the Nikkei 225 broke above the ascending channel pattern in Q4 2025. After this breakout, Q1 2026 was strongly positive, while Q2 2026 has already gained over 24%.

The RSI has reached extremely overbought region in the long term, which indicates that the short-term top may develop soon.

This strong bullish trend is due to the perfect bottom formation since 1996. The chart shows that the Nikkei 225 had been in downtrend from 1996 to 2014. Then, the breakout from 2014 triggered strong buy signals in 2016 and 2020, which pushed the Nikkei 225 into a record rally.

To further understand the monthly behaviour of the Nikkei 225, April and May have been strong months. The month of April gained 12.60%, while May gained 10.79%.

Therefore, the last month of the second quarter, June 2026, is also expected to be positive and push the index to the 72,600 level. But the immediate target of this surge remains the 70,000 area.

The short-term price structure remains strongly bullish by forming the V-shaped pattern. This indicates further upside this week.

Bottom Line

Japanese stocks are still bullish as the demand for AI and semiconductor stocks continues to add to support for the Nikkei 225. Investors remain bullish on Japan as the technology group rally proves. But the index is now close to overbought levels so there could be a pullback in the near future. A correction to $63,800 and $60,000 will likely offer another rally to 70,000 and 72,500.

Read more: Japan Stocks Rally as AI Boom Boosts Sentiment