Reuters

Japan’s Nikkei Snaps Losing Streak as Chip-Sector Stocks Rebound (Update 1)

Yomiuri Shimbun file photo
Tokyo Stock Exchange

Reuters

11:58 JST, April 18, 2024 (updated at 16:30 JST)

TOKYO (Reuters) – Japan’s Nikkei share average rose for the first time in four sessions on Thursday, as chip-sector shares reversed early declines and bank shares rallied.

The Nikkei ended the day up 0.31% at 38,079.70, bouncing back from a drop of as much as 0.83% early in the session to recover the psychological 38,000 mark.

For the week though, the index remains 3.65% lower, on track for the biggest weekly decline since December 2022.

The broader Topix reversed small early losses to finish with a 0.54% gain.

“The Japanese market has been strong since the start of the year, so it’s natural for some investors to take profits,” leading to weakness at the start of this week, said Kenji Abe, an equities strategist at Daiwa Securities.

“I’m still sanguine about the outlook for Japanese equities because earnings are quite robust,” Abe said, predicting the Nikkei will climb to 43,000 over the coming 12 months.

For the year, the Nikkei remains up 13.79%. It rose to a record 41,087.75 on March 22, and had declined 7.61% from that point as of Wednesday’s close.

The earnings season began earlier this month with retailers headlining early reports. Tech names are due from next week, although the bulk of company announcements come in mid-May.

Japanese semiconductor shares initially sank on Thursday after Dutch computer chip equipment maker ASML announced new bookings on Wednesday that fell well short of analyst estimates.

However, the mood turned amid hopes for strong earnings from Taiwanese chipmaker TSMC, which bore fruit about half an hour to the Tokyo market close with an estimate-topping 9% rise in net profit.

Chip-testing equipment maker Advantest rose more than 5% to be the Nikkei’s top performer, reversing an initial 2.5% decline.

Regional lenders were another bright spot, with Concordia Financial Group climbing 4.82%, Chiba Bank up 3.46% and Fukuoka Financial Group gaining 3.04%.