On Thursday, Japan’s Nikkei reached a one-month high as chip-related stocks went up along with their U.S. counterparts overnight. This sudden rise was brought forth by the optimism over the trade talks between the world’s largest two economies.

The Nikkei share average went up by 0.3 percent to reach 21,787.60 in mid-morning trade. This is the highest point it has reached since March 5th, 2019.

Silicon product makers and chip equipment makers, who depend heavily on Chinese demand, put up a rally. Tokyo Electron went up by 2.7 percent as Sumco Corp gained 5.1 percent and Advantest Corp jumped 3.4 percent.

The Philadelphia Semiconductor index went up by 2.3 percent on Wednesday. According to Katsuhiko Nakamura, a senior technical analyst at Mizuho Securities, investors have become confident due to strong American shares as well due to the beginning of a new fiscal year and new funding.

Nakamura mentioned that foreign investors have been investing in Japanese cash stocks during the month of April for the last 18 years. He used data from the Tokyo Stock Exchange to support this statement.

Optimism about the ongoing trade talks between the United States and China has boosted investor risk appetite this week. Larry Kudlow, White House economic advisor, said on Wednesday that trade talks between the United States and China had been making the headway in Beijing last week.

Other cyclical stocks also witnessed a gain in demand with Komatsu Ltd rising 2 percent and TDK Corp adding 3.1 percent.

Japan Display Inc witnessed a 7 percent jump, thereby extending its gains from the previous day. This was after Sources told Reuters that Japan Display would be supplying organic light emitting diode screens or OLED screens for the Apple Watch later in 2019.

The company is also looking for investment from a group that has China Silk Road Investment Capital (CSIS) on its board according to sources who spoke to Reuters. The company is currently aiming at raising at least $990 million in fresh financing.

The broader Topix went up by 0.2 percent to 1,625.08.

SOX index rose with Tokyo Electron, Sumco and Advantest Corp reporting gains. Foreign investors have been buying Japan cash stock every April for the last eighteen years.

The trade talks between the world’s two largest economies seem to be making headway, boosting confidence among investors. This has also increased their appetite for risk. Japan Display’s jump of 7 percent has also boosted investor confidence.