Japan’s Nikkei share average rose more than 2% on Monday to a three-month high, driven by gains in artificial intelligence-related stocks following a rally on Wall Street at the end of last week.

The Nikkei rose 2.53% to 70,037.61 by the midday break, its highest level since early July, as per a report by Reuters. The broader Topix gained 1.16% to 4,138.57.

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Investors bought AI-related stocks, although market sentiment remained more subdued than earlier in the year when the Nikkei hit a record high, Reuters reported, citing Mamoru Shimode, chief strategist at Resona Asset Management. Shimode said the AI rally was likely to continue, but investors would become more selective.

U.S. stocks advanced on Friday after weaker-than-expected jobs data reduced expectations of a Federal Reserve rate hike at its policy meeting this month.

In Japan, chip-related stocks led Monday’s gains. Advantest and Tokyo Electron climbed 4.5% and 5.7%, respectively, providing the biggest boosts to the Nikkei. Technology investor SoftBank Group rose 3.68%.

Memory-chip maker Kioxia edged up 0.49%. Its shares remain nearly 50% below the record high reached in mid-June.

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Kioxia’s limited gain reflected a balance between buying interest and selling by investors looking to reduce losses as the stock rose, Shimode told Reuters.

Bank stocks also advanced, with Mitsubishi UFJ Financial Group gaining 0.99% and Mizuho Financial Group rising 1.86%.

The Topix growth share index rose 1.46%, while the value share index gained 0.89%.

Of more than 1,500 stocks on the Tokyo Stock Exchange’s Prime Market, 53% rose, 42% fell and 3% were unchanged.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)