Japan's Nikkei crosses 51,000 for first time on tech optimism

By Rocky Swift

TOKYO, Oct 29 (Reuters) - Japan's Nikkei share average surged past the key 51,000 level for the first time on Wednesday, underpinned by investor optimism over artificial intelligence sector investments.

The tech-heavy Nikkei 225 Index .N225 closed up 2.2% at an unprecedented 51,307.65, while the broader Topix index .TOPX slid 0.2% as a rebound in the yen acted as a headwind for most exporters.

It was the biggest daily gap in returns for the gauges since August 5, 2020.

The Nikkei broke through 45,000 on September 16 and has marched through successive round numbers at a rapid clip. It may climb further, to about 63,000 by 2030, as Japan flips to an inflationary economy, corporate governance reforms advance, and new Prime Minister Sanae Takaichi pursues growth strategies, said Rakuten Securities chief strategist Masayuki Kubota.

"Although the upward pitch is a little too fast, I see it as a move that correctly assesses the value of Japanese shares."

Key drivers on Wednesday were signs that the artificial intelligence investment boom has further to run at home and abroad.

Advantest 6857.T, a Japanese chip-testing equipment supplier to major technology companies, soared a record 22% after it hiked its annual profit forecast by one quarter on surging demand.

In the U.S., all three stock indexes closed at record highs on Tuesday after AI darling Nvidia NVDA.O said it will build AI supercomputers for the U.S. energy department.

"Stocks such as Advantest and SoftBank Group are essentially driving the stock market," said Nomura Securities strategist Wataru Akiyama. "It's unclear how long this will last. Once the initial wave passes, the upward momentum may ease."

SoftBank Group 9984.T, a major tech investor, climbed 3.9% and was the second-biggest driver of the Nikkei in terms of index points. Lasertec 6920.T, another semiconductor heavyweight, surged 7.7%.

There were 43 advancers on the Nikkei index against 182 decliners.