Japan’s Nikkei Rebounds from Worst Day in 3 Weeks, Chip Stocks Lead Gains

Reuters

TOKYO, Oct 27 (Reuters) – Japan’s Nikkei share average rose 1.5% on Friday after falling to its worst day in three weeks in the previous session, with chip-related stocks leading the recovery.

The Nikkei had gained 1.54% to 31,070.36 by the midday break, after losing 2.14% in the previous session in its sharpest fall since Oct. 4. The broader Topix was up 1.42% at 2,255.79.

The Nikkei has declined 0.6% so far in the week, while the Topix is flat.

“Investors bought back stocks as the Nikkei approached its lowest level so far this month. The shares have fallen to a level which we consider cheap,” said Ikuo Mitsui, fund manager at Aizawa Securities.

“But overall Japanese companies are expected to boost their earnings, which has prompted investors to buy back shares.Towards the peak of the earnings season, investors will become more selective about which companies they want to buy.”

Chip-testing equipment maker Advantest rose 1.73% after a 7% decline in the previous session, providing the biggest boost to the Nikkei.

Chip-making equipment maker Tokyo Electron rose 1.76% and silicon wafer maker Shin-Etsu Chemical jumped 3.11%.

Fujitsu surged 11% to become the top performer on the Nikkei, even though the computer maker cut its full-year forecasts for sales and operating profit.

Shares in Takeda Pharmaceutical fell 6.35% after the country’s biggest drugmaker slashed its full-year profit forecast by 36%.

Canon lost 3.58% after the camera maker cut its annual sales forecast.