Technology stocks drove the gains after Microsoft and Amazon reported strong earnings and committed to investing in AI infrastructure, boosting investor confidence in the global AI supply chain. Advantest saw a significant jump of 15.7% after raising its annual operating profit forecast by 35% due to demand for AI chip-testing equipment. Other technology companies like Tokyo Electron, Kioxia Holdings, SoftBank Group, Fujikura, and Lasertec also experienced substantial gains.

Additionally, the Bank of Japan kept its benchmark interest rate steady at 1%, following a 25-basis-point hike in June, marking the highestborrowing costs since 1995.