Japanese hardware shares rally, with Kioxia climbing sevenfold this year, dwarfing Samsung’s growth.

SoftBank’s €75bn pledge to build AI clusters in France helped lift its stock, ending Toyota’s 20‑year reign as Japan’s top company. The Nikkei 225 gained 36% since January, led by AI‑linked firms.

Investors face a concentrated market: top Nikkei gainers are all AI‑related, while the broader Topix, covering a fifth of its index, remains more diversified. Japanese bond yields near 3%, a 30‑year high, add fiscal confidence.

Governance reforms push Japanese executives toward higher profitability, targeting equity returns near 11%. These shifts may cushion a potential AI correction, though past hardware booms show cycles can be short‑lived.