Japan’s Nikkei Stock Reverses Gains to End Lower as Chip-Related Shares Fall (UPDATE 1)

Reuters

13:10 JST, January 15, 2025 (updated at 16:40 JST)

TOKYO (Reuters) – Japan’s Nikkei share average gave up early gains to end lower on Wednesday, dragged down by chip-related stocks, while uncertainties about the Bank of Japan’s policy outlook weighed on sentiment.

The Nikkei slipped 0.08% to 38,444.58, reversing the index’s as much as 0.78% gain earlier in the session. The benchmark extended losses to the fifth straight session.

“The chip-related stocks were weak, which is why the Nikkei ended lower. The market momentum was not that bad, with the Topix closing higher,” said Naoki Fujiwara, senior fund manager at Shinkin Asset Management.

The broader Topix rose 0.31% to 2,690.81.

Advantest lost 3.45% to drag the Nikkei the most. The chip-testing equipment maker, a supplier to Nvidia, have slid 12% so far this week amid news that the U.S. government would further curb artificial intelligence chip and technology exports.

Chip-making equipment maker Tokyo Electron fell 1.4%.

Uncertainties about the BOJ’s rate policy weighed on investor sentiment, Fujiwara said.

The BOJ will raise interest rates and adjust the degree of monetary support if improvements in the economy and price conditions continue, Governor Kazuo Ueda said.

Financials rose on the growing hopes of a rate hike, with Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group gaining 1.77% and 2.4%, respectively.

The banking index climbed 2.24% to become the top performer among the Tokyo Stock Exchange’s 33 industry sub-indexes.

Fast Retailing, which operates Uniqlo clothing stores, climbed 1.3% to lend the biggest support to the Nikkei.

Overnight, the S&P 500 advanced and U.S. Treasury yields fell after data showed producer prices increased modestly last month.

“Rising U.S. yields hurt the Japanese stock market. But if excessive caution for inflation and a possible rate hike in the U.S. eases, the market will regain momentum,” said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.