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Nikkei Rallies Led by Surging Chip Issues

Yomiuri Shimbun file photo
Tokyo Stock Exchange

TOKYO (Jiji Press) — The benchmark Nikkei stock average rebounded Thursday, led by surging semiconductor-related issues.

The Nikkei average of 225 selected issues listed on the Tokyo Stock Exchange’s Prime section gained 118.45 points, or 0.39%, to finish at 30,801.13, following a drop of 275.09 points Wednesday. It posted a higher finish for the first time in three days. Meanwhile, the broader TOPIX index shed 6.25 points, or 0.29%, to end at 2,146.15, after losing 9.09 points the previous day. It fell the third day in a row.

The Nikkei’s rally was fueled by the strength of heavyweight chip-linked components, with investor appetite for the sector growing after U.S. chip giant Nvidia logged a rosy sales forecast for the quarter through July on Wednesday.

Meanwhile, the TOPIX remained weak as persistent fears over the possibility of the U.S. government defaulting on its debt due to being unable to raise the federal debt limit dampened the overall market sentiment.

Worries about the U.S. debt limit crisis are mounting especially because Treasury Secretary Janet Yellen warned earlier this week that the country could default on its debt obligations as early as June 1 unless the ceiling is raised, brokers said.

“The market is continuing to seesaw amid selling reflecting a sense of overheating and buying on dips, as was seen through Wednesday,” said Maki Sawada, strategist at Nomura Securities Co.

“Several technical indicators still suggest that Tokyo stocks have been overbought,” an official at a major securities firm said. “The market’s speed correction will likely continue.”

On the Prime section, decliners outnumbered gainers 1,010 to 726 while 99 issues were unchanged. Volume inched up to 1.26 billion shares from Wednesday’s 1.24 billion shares.