Asia report: Tokyo stocks extend election rally as chipmaker results impress

(Sharecast News) - Asian stock markets rose on Tuesday, with Tokyo once again outperforming following the weekend's elections in Japan, while sentiment was supported by some impressive monthly sales figures from chip groups TSMC and SMIC.

Japanese investors continued to celebrate a historic election victory, which saw the ruling Liberal Democratic Party, led by prime minister Sanae Takaichi, capture a two-thirds supermajority in the 465-seat lower house.

The Nikkei 225, which surged 3.9% on Monday, was up a further 2.3%, hitting yet another record high of 57,650.54, following a 35% climb over the past six months.

Japanese heavyweight SoftBank was among the day's best performing stocks, jumping over 10%, after its telecom arm lifted fullyear profit guidance, with renewed optimism around Arm also boosting sentiment toward the group's AI exposure.

Also in Tokyo, industrial groups Nissan Chemical, Mazda Motor and Sumitomo Heavy Industries all rose over 10%.

Analysts believe the so-called 'Takaichi trade' has driven Japanese stocks to repeated highs in recent months, on expectations her policies would extend Abenomics-style growth while favouring looser monetary conditions and higher government spending.

Elsewhere, market movements were more muted: the Hang Seng rose 0.6% and the Shanghai Composite gained 0.1%, while Bombay's Sensex rose 0.2%, Busan's Kospi rose 0.1% and Singapore's STI fell 0.1%.

Contract chipmaker TSMC, which supplies chip for giants like Apple and Nvidia, jumped 4% in Taipei after posting a 37% year-on-year jump in January sales on the back of ongoing bumper AI spending.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said the growth was "well above seasonal norms, with first-quarter sales now tracking ahead of market expectations". Britzman added that the results offer clear positive readacross for Nvidia ahead of its eagerly anticipated earnings report later this month.

"That strength is consistent with robust demand for AI servers and faster build rates, reinforcing confidence in Nvidia's near-term outlook ahead of its lateFebruary results. Set against already eye-catching capital spending plans from mega-cap technology firms, there's no shortage of evidence that Nvidia's earnings trajectory remains exceptionally strong," he said.

Sector peer SMIC also rose in Shanghai after reporting a 61% jump in fourth-quarter profits and a 13% increase in revenues - with both figures coming in well ahead of analysts' forecasts.

Chinese electric car giant BYD gained after launching a US lawsuit against Donald Trump's trade tariffs, seeking a refund on all US auto duties paid since April 2025.